Canada’s dairy sector still waiting for compensation details

Feds had promised to say by end of June how they would compensate supply managed farmers for loss of market

Glacier FarmMedia – Federal Agriculture Minister Marie-Claude Bibeau made a brief stop at Dairy Farmers of Canada annual meeting in Saskatoon recently, where she spoke with Canadian dairy producers and announced an $11.4 million federal contribution to the Canadian dairy research cluster.

However, she failed to deliver the information that Canadian dairy farmers have been waiting to hear.

Producers have been awaiting details on how a $3.9 billion compensation package announced by Ottawa earlier this year will be distributed among producers in Canada’s supply managed dairy, egg and poultry industries.

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Closeup shot of a glass of milk on a dairy farm with cattle grazing in the background

Farmers operating in Canada’s five supply-managed sectors have seen their markets gradually eroded over the past few decades, initially through the World Trade Organization and more recently by multilateral trade agreements including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Comprehensive Economic Trade Agreement (CETA) with Europe and the yet-to-be-ratified United States-Mexico-Canada Agreement (USMCA).

All told, the Canadian dairy industry has lost an estimated 18 per cent of its domestic market to outside competitors over the past number of years, according to the Dairy Farmers of Canada.

Excluding financial losses associated with the WTO, losses resulting from the ratification of CPTPP, CETA and USMCA will cost the Canadian dairy industry an estimated $450 million per year, DFC officials said.

Prime Minister Justin Trudeau’s government had earlier promised that details of the federal compensation package would be announced by the end of June.

In Saskatoon, Bibeau said Ottawa remains committed to announcing details before the end of the Liberal government’s current mandate.

However, she offered no other details as to how the compensation would be delivered or how much of the $3.9 billion fund would be allocated to the dairy industry.

Marie-Claude Bibeau.
photo: File/Allan Dawson

“To compensate for the impacts of the CPTPP… (and CETA), we will deliver up to $3.9 billion to producers in Canada’s five supply managed sectors,” Bibeau said.

“This includes up to $2.4 billion to sustain incomes of producers as well as $1.5 billion to protect against any reduction in quota value when farmers buy or sell quota…

“We are committed to making an announcement on the details of the compensation before the end of this mandate and we will begin to get processes underway to ensure you can benefit from it as soon as possible.”

Bibeau said a Liberal government, if re-elected, would also provide additional compensation to offset market losses incurred if the USMCA is ratified.

So far, only Mexico has ratified the deal.

The Liberal government introduced a bill to implement the USMCA last month, but it is unlikely to be passed before the next federal election.

Ottawa’s announcement of an $11.4 million investment in the dairy research cluster drew applause from Canadian dairy farmers who were in Saskatoon July 16-17 to attend the DFC’s annual meeting.

The federal investment will be used to support dairy research projects in cattle genetics, human nutrition and industry sustainability.

However, Ottawa’s failure to deliver details on the larger compensation package did not sit well with some anxious producers, whose markets are being opened up to global competitors at a time when liquid milk consumption continues to decrease.

DFC president Pierre Lampron, a dairy producer from Saint Boniface, Que., said dairy farmers across Canada have been waiting anxiously for the federal program to be rolled out.

“We are looking for (details) today with the minister… but she (didn’t) announce anything,” said Lampron.

“This (federal compensation package) sure wasn’t our plan. We didn’t want to give up access… It’s a Band-Aid for us, but it’s not what we wanted.”

Lampron said it is critically important that future agreements with trading partners such as Mercosur nations in South America and the post-Brexit United Kingdom do not make further concessions at the cost of Canada’s supply managed producers.

The impact on Canadian dairy producers already has been huge, he added.

“It’s why we lobby… and it’s why we say to government, ‘enough is enough,’” he said in an interview.

“I think we gave enough.”

This article was originally published at the Western Producer.

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