From government regulation to the open market: A study on the effects of regulation change in the dairy industry in Australia, Ireland, and Canada - A case study analysis

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Zwart, Christine N.

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University of Guelph

Abstract

With the rise in globalization international trade agreements introduce new opportunities for trade on an international scale, yet can affect how agriculture operates at the local level. This paper examines how deregulation and trade liberalization has affected the dairy industry in Australia and discusses how liberalization through the CAP, the CETA, and the TPP may affect the dairy industries in Ireland and Canada. By using Australia as a benchmark to make some predictions about the Irish and Canadian cases it is apparent that under the right conditions the dairy industry has the ability to survive major policy changes. In the Irish case study, it is apparent that their dairy industry has great capacity for growth under recent changes to the CAP, however their goal of increasing their dairy yields by 50% by 2020 may be overly optimistic as Irish producers will be competing for international markets. Ireland is also likely to see a reduction in total number of dairy farms over time. The future for Canadian dairy is less certain should the government abandon supply management. Many economists would like to see the end of supply management in Canada, while those in the dairy sector are set on keeping it. So far it is uncertain if Canada would be competitive in a global market due to challenges such as: high production costs, high value of dairy quotas, and low dairy exports. While there are no certainties regarding the health of an industry after significant changes in regulation, understanding what happened in other countries, such as Australia, provide valuable lessons and can give context to the global market.

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Dairy, deregulation, quota, supply management, common agricultural policy, trans-pacific partnership, common economic and free trade agreement, free trade agreement, global market

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