Thanks, Susan.
We state this because supply management is becoming a system under increasing strain, suffering a growing number of end runs which threaten its continued relevance.
Overseas there is the rise of new, lower cost centres of production, such as Thailand and Brazil, in the case of chicken, that can better compete on the world markets. Here at home, increased amounts of supply management products imported to Canada in the form of pizza kits, spent fowl, or even milk are potentially substituting Canadian production. In our own industry, supply-managed products, not meeting the commercial requirements of our members, lead them to seek alternative menu opportunities.
We were just presenting to the Canadian Dairy Commission a couple of hours ago and we had a great conversation. We're finding that dairy is being priced off our menu.
Canada, through consumers and our industry, pays a high price for farm product produced under supply management rules. Domestic prices across the board are high relative to U.S. and other world prices. These sectors, meanwhile, are stagnant in terms of their economic growth and output.
In regard to agricultural supply management, what seemed like a good idea when these systems were established half a century ago has less relevance today and the system is much less effective. As part of a swiftly changing world, one in which government has stepped back and allowed industry and open markets to manage themselves and to decide supply and demand, price and quality, we believe it's time to modernize Canada's farm supply management system.
As one of the country's largest buyers of agricultural products, we have a vested interest in the continued success of Canadian farm products, and we want our country's agriculture sector to be economically strong. We also want to continue to be the source of thousands of jobs in the sector. An important reason for our position is that many of our members prefer to source their product locally. For reasons of freshness and logistics efficiency, all things being equal, they would choose the Canadian product every time over an import alternative.
We believe it's time to encourage in Canadian farmers a renewed sense of competition, innovation, and desire for economic growth, as well as an incentive to better respond to evolving market demand and consumer preference in our industry, as well as others, and to seize our share of the new export markets. We would urge government and the farm community involved to move to swiftly modernize supply management and begin the transition of these agriculture industries to operate on a more rational economic basis.
In the final analysis, we believe Canada has little choice but to do this. Protracted delay will only cause lost export opportunities, increased import substitution in our domestic market, and continued high prices for Canadian consumers and our members alike.
Canada and our individual farmers will find it increasingly difficult in the future to shelter behind those tariff walls that remain high. Butter is almost 300%; dairy is 250%. The value proposition represented by products from ever-developing and efficient overseas competitors will ensure their way into our domestic market. We're seeing it now. The best defence for all segments of the Canadian agricultural sector will be a robust offence.
There is little time to waste. Just as it's difficult for our farm producers to increasingly compete in our own domestic market versus imported product, our ability to compete in international markets is likely constrained by the cost and price structure created by the current supply management system. Canada is the last country in the world with supply management governing production in several of its major agricultural sectors. Countries that have abolished the system have typically done so in a transitional fashion. We are not saying to abolish supply management. We're saying we have to make some changes.
Federal officials are already reported as saying they will work with provincial governments on a compensation program for dairy farmers, for instance, should this group suffer financial loss from the CETA trade arrangement. This measure is prudent, but it could be the latest of a number of stopgap measures intended to preserve the integrity of supply management and plug the numerous emerging gaps that, over time, will make an already complex system even more so. Administrative burden and costs can only rise.
As representatives of an industry in which fierce competition among market players is the norm and a hallmark of the game, we advocate that the government focus on financial and business opportunities that the CETA will offer the broader Canadian economy, as well as the majority of Canadian farmers who already operate without the protection of tariff walls, and use this event as the catalyst for a serious reappraisal of the continued value of our supply management system.
Thank you, Mr. Chair.