Should the price of milk be regulated?

Should the price of milk be regulated?

Right now in Quebec milk prices are controlled by a Government body as to the maximum and minimum price that retailers can sell the product.

Milk_QuebonIt falls under the RMAAQ, or in English the Food and Agriculture Marketing Board (FAMB) who for the last ten years have maintained a pricing control in order to meet a supply and demand balance, keeping producers and consumers protected.

Recently there has been talk of relinquishing this price indexing for an open market policy where milk would be sold like any other commodity allowing the price to be controlled by the people who sell it rather than by the Government. A public consultation forum will be held on January 29th to discuss the matter. Consumers, producers and retailers will all have their say, as the change would affect all of them.

Producers are concerned they may have to sell their milk for less than what the Government guarantees them with the present system, but retailers see it as an opportunity both for marketing and for the consumer.

So who would benefit and who would suffer in an eventual milk price war? Obviously the consumer would benefit because the large grocery chains would lower their price like they do with butter or cheese to attract customers which makes perfect sense for any retailer. The smaller outlets on the other hand would suffer, much like they do on other products because a lower price would reduce their profit margin; the old story of “big guy over little guy” would once again prevail. The Montreal Economic Institute is in favour of deregulation, as are most economists.

The production and marketing of milk is an important resource for the province of Québec as it is one of the larger producers of milk in Canada and even exports some of its production to neighbouring provinces.
………………………………………………….. Staff Writer

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