The cost of eliminating Canada’s dairy supply scheme and buying out the country’s 12,500 dairy farm quotas would be much lower than the previous estimates of over $20 billion according to a study to be released by the Conference Board of Canada. The study estimates that it would cost the Canadian government between $3.6 billion and $4.7 billion basing these estimates on a book value valuation instead of a market value system because many farmers acquired their quotas for free when the quota system was established in the 1970’s or have written off the cost of the quota long ago. Canada’s closely held and protected dairy industry is not able to take advantage of the growing global demand for dairy especially from Asia and is facing threats from trade agreement negotiations with the EU and the 12 countries of the Trans Pacific Partnership.
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