Wednesday 20 February 2013

Supply Management Cartels

Remember the great maple syrup heist of a couple of months ago? The National Post's Graeme Hamilton traces the problem back to source.
Beyond the jokes about sticky-fingered thieves, the crime has exposed a simmering war in the woods over syrup production and sales. And it has shed light on an unexpected accomplice in the growing illicit syrup trade: The province’s enforcement of a syrup cartel that has, since it was instituted a decade ago, helped spawn Prohibition-style smuggling and illegal sales.
Since the Federation of Quebec Maple Syrup Producers tightened its supply-management system, introducing quotas and a single sales agency in 2002, a thriving black market has developed. The theft from the strategic reserve was certainly the most brazen assault on the federation’s strict control of the industry, but it was far from the first one.
Supply management was implemented in the name of ensuring producers were getting a “fair” price for their product, and over the past decade prices for the now-controlled product have predictably and steadily climbed. Producers who exceed their quotas must transfer the excess into the strategic reserve, which is intended to cushion the effect of a bad season.
But for many, the federation’s zealous oversight goes too far. Cases before the Régie des marchés agricoles et alimentaires, the administrative tribunal that enforces the law governing the maple-syrup industry, give an indication of tactics used by the federation to enforce its cartel. Inspectors use aliases to stage phoney illegal syrup deals to ensnare bootleggers, just like undercover police conducting drug stings. And the Régie can order producers to provide utility bills and bank statements if they are suspected of selling their syrup outside the approved market.
Read the whole thing. A whole lot of the maple syrup theft investigation looks rather more like cartel enforcement against chiselers.

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