Consumers need break on milk prices

Opinion

Hey there, time traveller!
This article was published 05/07/2022 (858 days ago), so information in it may no longer be current.

We have all seen the price of food going up. For low-income families, historically high inflation rates affect the basic nutritional options they can afford. Too often, even vital commodities become luxuries.

This has negative consequences for health and development, especially for children. Worryingly, a decision made the Canadian Dairy Commission could set the stage for milk prices to climb even higher.

In an unusual move, the federal Crown corporation has approved a mid-year 2.5 per cent hike in the price of wholesale milk. Farmers will receive the new higher rate starting Sept. 1. Undoubtedly, producers need higher prices to offset their input costs. However, this increase is on top of an 8.4 per cent increase earlier this year.

This rate applies to the wholesale rate farmers will receive. However, retail milk prices in Manitoba are regulated under the Milk Prices Review Act, with price changes approved by the Manitoba Farm Products Marketing Council (MFPMC). The act requires the MFPMC to consider production and processing costs, as well as “the need to provide consumers with a continuous supply of fluid milk at reasonable prices.”

Taking account of the high financial stress families are facing, it should forgo passing on a second cost increase to consumers this year.

Already in 2022, the MFPMC approved a significant in hike the price of a litre of milk of between 12 and 13 per cent, depending on the class of fat content. Manitoba’s milk price increase was more than twice the level of inflation and higher than the price increase set by the Canadian Dairy Commission.

A second price increase this year would hit consumers unnecessarily hard. While families are hurting, corporate retailers are logging record profits. According to a report by the Canadian Centre for Policy Alternatives, pre-tax profits in the grocery sector were up $3.9 billion in 2021 compared to before the pandemic.

Manitoba should not raise milk prices to further pad shareholder profits at the expense of families struggling to fill their refrigerators.

The regulation of milk prices in Manitoba goes back to the creation of the Milk Control Board during the 1930s to help families afford milk for their children during the Great Depression. In 1980, the Progressive Conservative government of Sterling Lyon updated milk price legislation, passing the Milk Prices Review Act and establishing the Milk Prices Review Commission. The commission balanced a fair price for farmers with protecting the interests of consumers.

More recently, this balance has shifted. In 2017, Brian Pallister’s government eliminated the Milk Prices Review Commission as part of an overhaul of provincially appointed boards and commissions. Control of milk prices was handed over to the MFPMC.

While the Milk Prices Review Commission included representation of the voices of producers and consumers as well as the public at large, producer representatives dominate the MFPMC. It currently has members from seven rural Manitoba communities. Notably lacking are representatives from Winnipeg, other Manitoba cities or any First Nations communities.

Nor do any board members indicate a connection with Manitoba’s growing newcomer population. All have backgrounds in the agri-business sector, including a vice-president of the Manitoba Beef Producers and a federally registered lobbyist for the Dairy Farmers of Canada.

This heavily industry-weighted and politically appointed board is given extraordinary powers in setting milk prices in Manitoba. While the minister of agriculture has regulatory oversight over the MFPMC, this council is unusually given powers to make regulations directly, which, according to its governing act, have “the force of law.”

The body’s decisions lack responsibility. When I wrote Agriculture Minister Derek Johnson for clarification on the recent milk-price increase, my queries were directed back to the MFPMC. Meanwhile, while the act stipulates that any person who is dissatisfied with the price of milk may request a review, the MFPMC lacks any mechanism to fulfil such requests.

Milk prices in Manitoba have become a prime example of the process political scientists refer to as “regulatory capture,” in which institutions meant serve a public interest are co-opted to instead represent the interests of the industries they were set up to regulate.

Given these gaps of transparency and accountability, Johnson should take steps to increase diversity in the MFPMC and to return the voices of consumers and anti-poverty experts to milk price regulation in Manitoba. This government likes to speak of helping to make life more affordable for Manitobans. The sad record is that in the province with the highest rate of child poverty, tens of thousands of families face hardship in putting milk on their kitchen tables.

At the very least, the government should demand that the MFPMC put pause to any further price increases in Manitoba.

Josh Brandon is a community animator at the Social Planning Council of Winnipeg.