Cartels and Subsidies in Canadian Agriculture

6758Predrag Rajsic writes in today’s Mises Daily:

Canada…has a relatively long history of agricultural policy. While sometimes similar to American agricultural policies, there are key differences with Canadian agriculture that may help illustrate the economic costs of intervention in differing economies…

One of the first pieces of legislation intended to keep farmers on the land was the Canadian Western Grain Transportation Act of 1897, which remained in power for almost 100 years — until 1995. The Act put in place legal obligations for the government to subsidize transportation of grain from western to eastern Canada. After this act was repealed in 1995, it became more profitable to ship Canadian grain southward into the US than to sell it domestically. In this case, the US consumers benefited from the abolition of this Canadian law.

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