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Comment by worik | Hacker News Reader

Any Canadians here to comment on the milk tariff policies?

I have spent ten days of my life in Canada and I learnt of the tariffs by news reports concerning people driving to USA, loading up on milk, coming home.

Tariffs are not always stupid. But in most cases there is a better alternative.

E.g. Canada could subsidise domestic milk producers. (We used to do that in New Zealand)

There is a lot of nonsense talked about economics ("tariffs always bad" is an example) because there are strong incentives at work for the actors. It makes it very difficult for policy makers to have good, responsive, effective economic policy.

Money and politics? What could go wrong....

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Naturally individuals can cross the border and get cheaper stuff. But in the grand scale of things, that's irrelevant.

IMO tarifs are preferable to subsidies. Subsidies encourage over production, plus still places the industry at risk. Tarifs just incentivize purchasing local. Plus for whatever revenue there is, it's an income to govt coffers. Whereas a subsidy is an expense. And ultimately the cost is born by the consumer of that product, not the wider tax base.

So, well targeted, it's a more effective tool than a subsidy, and much less prone to waste or corruption.

Put another way, a tarrif is much cheaper than a subsidy (and tarrif makes for a better outcome.)

> Subsidies encourage over production

That's largely acceptable, and certainly preferable to underproduction, for resources that we simply can't do without. Dairy was (and still is) considered one of those resources as a superfood. Now maybe milk might not hold up anymore as being so critical to childhood nutrition (though I'm skeptical), but I think the reasoning behind it makes sense.

> Tarifs just incentivize purchasing local.

Sure, they also incentivize not eating. But commodification of basic resources is nothing new to americans, I suppose.

Some things are worth everyone pitching in for. Tariffs place the burden of living here on the individual. I don't really see any benefit from this.... fuck local businesses if they can't compete. The entire pitch of living here is that we'll let the market determine every aspect of our lives; why would we not double down when it came to letting businesses fail?

> E.g. Canada could subsidise domestic milk producers. (We used to do that in New Zealand)

Like the US does? Isn't that just a race to the bottom then?

The Canadian supply management system means that those that purchase milk pay the amount needed to keep the Canadian dairy industry afloat. If you don't buy milk you don't pay.

With subsidies everyone pays, regardless of whether you use the product(s) or not.

Of course subsidies make the price cheaper, which helps with cost of living, which can be quite progressive (and often children are the ones that drink the most milk).

Further, the US subsidies milk even though its consumption has been falling for decades:

* http://www.ers.usda.gov/amber-waves/2022/june/fluid-milk-con...

Which solution is better / "best"? I don't know.

(Am Canadian.)

The supply and purchase of Dairy in Canada is centralized through the government.

Government sets a supply goal and buys that amount from farmers and then resells to the grocers / public.

It's been this way for a long time. The tarrifs are there to control for a case of oversupply in the market, but I also seem to remember that those supply targets haven't actually been met in a single year so the tarrifs effectively don't apply.

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