TPP: resetting the trade table

They might have been a bit grudging about it, but most Canadian dairy farmers breathed sighs of relief when the Trans-Pacific Partnership deal was announced.

Rather than being scrapped or crippled as feared by many, the supply management system was only crimped.

And dairy farmer leaders said they now believe they can see a clear path into the future, even if the path leads through darker terrain than they are used to.

“This thing has finally been settled and we know where we’re at,” said Manitoba Dairy Producers chair and Steinbach farmer David Wiens. “The worst thing is to be left in the dark.”

Alberta Milk chair Tom Kootstra felt similarly relieved, with supply management preserved within the deal and only a small share of Canadian dairy production given to foreign suppliers.

“I am relieved that a TPP deal was reached,” he said.“There was a lot of uncertainty about the future.”

The news of the deal reverberated across the agriculture industry this week, and sector by sector the reactions were mostly favourable.

The beef industry quickly pointed out that Canada now ships about $100 million worth of beef to Japan despite high tariffs and it expects the business to grow as tariffs come down.

Pork sector officials expressed relief, saying the deal now ensures Canada will not be shut out of key markets.

Grains and oilseeds farmers, processors and exporters expressed optimism that the deal could be worth more than $1 billion, but cautioned that the fruits of the deal may take several years.

In the dairy sector, Dairy Farmers of Canada issued a supportive tweet soon after the deal was announced, which said, “no negative impact and supply management preserved for the next generation.”

But some dairy farmers were less positive, tweeting back:

“In dreamland if you believe 3.25 percent giveaway is ‘preservation.’ ”

“3.25 percent market access. How is that not a negative impact?”

“Please send me 3.25 percent of your revenue to me. There will be no negative impacts.”

In the TPP deal, Canada agreed to allow 3.25 percent of foreign dairy product imports, 2.3 percent in eggs, 2.1 percent for chicken, two percent for turkey, and 1.5 percent for broiler hatching eggs.

Koostra said it will be difficult to convince some dairy farmers that losing 3.25 percent of the market is a victory, but he hopes farmers understand compromise was inevitable considering the im-mense pressure the government was under from countries like the U.S. and New Zealand.

He hopes farmers realize they should have a few years of peace in which to build their businesses.

And he was happy to hear Canadian international trade minister Ed Fast speak strongly in favour of supply management at the TPP news conference, seeming to offer it ongoing political support.

While the TPP deal seems to save supply management for now, agricultural policy and economics analyst Bertrand Montel doubts it changes the reality of the system, which is one of concentration, consolidation and decline.

“For the next 10 years maybe we will keep supply management, but we do not address any of the internal tensions,” said Montel.

“The two (compensation) programs will only increase or exacerbate those trends.”

Those compensation programs include $2.4 billion income support for farmers affected by the TPP and the previous Comprehensive Economic Trade Agreement with Europe, covering 100 percent of the costs for 10 years and a tapered-down level for the next five years. It also provides a $1.5 billion quota value protection plan, which will compensate farmers who see quota values damaged by the TPP deal.

Wiens said he needs to see more details about how those programs will work before knowing if dairy farmers will be fully protected, but he said he is hopeful.

“I think it will go a long way towards that. But it’s not permanent.”

And one thing Wiens, Kootstra and Montel all agree upon is that having more foreign milk pour into Canada will put more pressure on Canada’s already stressed dairy sector.

“We’re not exactly happy about more market access being given,” said Wiens.


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