Dairy industry cheesed off

Trade deal details still vague | Agreement with EU could see cheese imports to Canada double

Martin Van Diemen heard the news last week that a Canada-European Union trade deal could double European cheese exports to Canada.

An additional 17,000 tonnes could increase import levels to eight percent of domestic cheese consumption.

The dairy producer from Picture Butte, Alta., heard dairy industry leaders denounce it as a betrayal of the industry and an undermining of supply management. Governments said it was no big deal.

But by Oct. 21, he still had not heard the details.

“At this point, I think it is a negative for the industry and a lot of people are talking about it, but I really don’t have the facts,” he said. “The deal has been made and I’m scrambling for information to find out exactly what is going on.”

Alberta Milk meetings this week could provide answers for producers like Van Diemen about the effect on their farms.

However, judgments have already been reached at the national level.

Dairy Farmers of Canada president Wally Smith said DFC will fight it as a sellout of the Canadian industry.

“This deal would displace our local products with subsidized cheeses from the EU and risk our small businesses being shut down or put out of business,” he said.

“This is unacceptable.”

The Conservative government, which has worked hard to support supply management, has a different take.

It argued that offering Europe an extra 17,000 tonnes of access is not going to disrupt the system in a country that produced 330,000 tonnes of cheese in 2011.

As well, with cheese consumption growing by as much as 8,000 tonnes per year, the increased European market share would be swallowed up by the time the deal takes effect in 2015.

“We’re confident growth in the domestic market will easily outstrip the added access,” trade minister Ed Fast said as the government launched a national selling job for the deal.

In Brussels, when he announced the agreement-in-principle Oct. 18, prime minister Stephen Harper insisted that rather than a loss for supply management, the deal with the European Union was actually a major victory for the system.

“I think it is important to say that this is a major gain for them because here we have a trade agreement, a world-class trade agreement, that recognizes and protects the system,” he said.

“That is a major achievement in the development of the trade system across the world.”

Harper also said the federal government would offer compensation if there is any measurable damage to dairy sector sales. There was no indication if the compensation would apply to small artisan cheese makers affected by increased competition.

It was not clear how or to whom compensation could be paid.

Agriculture minister Gerry Ritz, who has played the lead role in winning dairy industry support, said he understands initial dairy industry concern, but the facts should calm the fears.

“I understand their angst because to them this is the thin edge of the wedge,” he said.

“But having said that, dairy farmers and processors control 96 percent of the market now and with the amount being allocated, they will have 92 percent. With consumption increasing, within a couple of years they will be back where they were before.”

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