Supply managed dairy sector will hear support, but should brace for battles

When Dairy Farmers of Canada delegates gather in Ottawa next week, it will be a time for comforting messages and mutual support.

On Jan. 31, as part of their Parliament Hill lobby day, dairy leaders will receive a strong endorsement from Liberal leader Bob Rae.

On Feb. 2, University of Waterloo professor Bruce Muirhead and Hugh Campbell from New Zealand will tell them that after research for a Scandinavian project, they have concluded that Canada’s supply management system is effective and sustainable. It is not guilty of the over-pricing and protectionist sins thrown at it by its many critics. Compared to dairy systems in other countries, Canada has no reason to be defensive.

Then, chief Canadian agricultural trade negotiator Gilles Gauthier will surely tell the conference that with the continuing stalemate at World Trade Organization talks, no deal is on the horizon that could force Canada to decide whether to sign a deal that includes tariff cuts.

Results from talks with the European Union and potential negotiations with Asia-Pacific countries are far enough in the future that there is no imminent threat of tough decisions.

DFC president Wally Smith, addressing his first policy convention as national leader, presumably will say that the system is strong and the industry is healthy.

And eastern Ontario Conservative MP Pierre Lemieux will kick off the conference with a repetition of government pledges of undying support for supply management. That message usually comes from agriculture minister Gerry Ritz, but this year parliamentary secretary Lemieux will fill in for the absent Ritz.

Lemieux comes from a constituency where dairy production is a major industry, which means he speaks from local interest as well as government promise.

So it will be a much-needed feel-good conference.

After a year of being battered by a seemingly relentless barrage of criticism from economists, academics, trade advocates and think-tanks, the sector could use a few days of comforting news.

Other supply-managed industries meeting in the capital in March will be hoping for the same air of optimism about the future.

Still, if not in public, at least in the corridors there will be chatter about the opposition campaign and the potential threats.

Canada wants into Trans-Pacific Partnership negotiations this year and the protectionist supply managed system will be one of the targets, led by Australia and New Zealand.

Dairy protectionism is also an issue as Canada and the EU move toward an expected 2012 free trade deal.

And while Canada’s politicians across party lines remain officially committed to supporting the system, a rare glimpse behind the scenes at the Liberal party convention in Ottawa this month showed at least the early signs of a debate about whether the party should be re-assessing its unbending allegiance to supply management protections in a world moving toward globalized trade.

Calgary delegate Ted Haney, a former president of the Canada Beef Export Federation, launched the debate, and although reporters were not allowed into later policy sessions, he said more people were at the microphones asking the same kind of questions.

There are enough clouds to lead to uneasiness even during a feel-good conference.

Supply managed dairy sector will hear support, but should brace for battles

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