Rent Seeking and Supply Management in Canadian Agriculture

The social costs of supply management in Canadian agriculture have been the subject of recent theoretical and empirical study. Thus far, analyses have focused on the conventional deadweight loss approach to describing social costs. This debate is expanded by considering how the scarce resources consumed in a competitive rent seeking process revise the interpretation and calculation of societal losses from supply management. It is concluded the exclusion of society's loss due to wasteful rent seeking activities results in underestimation of the social cost of supply management programs. Les coûts sociaux dus à la gestion des stocks dans l'agriculture Ca-nadienne ont fait l'object de plusieurs études recentes, aussi bien tháoriques qu'empiriques. Jusqu'à présent, les analyses ont mis l'accent sur l'approche conventionnelle de l'étude des pertes sêcnes pour décrire les coûts sociaux. Le débat sur la question est ici relancé quand on considère, dans le cadre d'un processus concurrentiel de recherche de plus-value áconomique, combien l'utilization des resources limitáes conduit à réviser l'interpretation et le calcul des pertes soc-iales duer à la gestion des stocks. En conclusion, I'exclusion des pertes sociales dues aux activitás ruineuses de recherché de plus-value a pour resultat de sousestimer le coût social des programmes de gestion des stocks. A recent article in this Journal by Schmitz reviews the economic effects of the supply management experience in Canada. Utilizing previously published empirical evidence and an economic surplus methodology, Schmitz concludes that the net welfare losses due to supply management are small for the commodities discussed. So small, in fact, that Schmitz wonders if policy makers can be influenced, on the basis of efficiency criteria, to reconsider supply management as an approach to ag-ricultural policy.