What happens when you collapse a supply management system

in life •  6 months ago 

Supply management of a product is an agreement between the producers to limit the production of that product. While there are negative connotations to the concept (cartels, monopolies etc) the basic premise is that is allow producers to set rules which encourages quality in their product while being able to maintain a proper income for themself as well as their workers. If the price of the product drops, the producer needs to find new mechanisms to reduce cost (replacing labour with capital assets eg buying robotic milking systems). As one can see in this video, when the dairy supply management system was removed in the EU, it resulted in loss of jobs for farmers as well as preventing the development of jobs and a stabilization of economies in Africa.

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