There was always going to be some hurt for the agriculture sector coming out of the Trans-Pacific Partnership agreement, and it was always going to be in the supply management area. The questions, as some held their breaths about the future of their livelihood, were how much hurt and would it be worth it.
The answers, it appears, are not as much hurt as some feared, and yes, the potential benefits made Canada’s participation in the agreement worth it.
Quite simply, the government handled the supply management issue deftly, surrendering a small portion of the quota market — 3.25 percent of the dairy market being the largest — yet providing sufficient compensation to assure dairy, poultry and egg farmers that their livelihoods are protected for the better part of a generation at levels that are healthy and reasonable.
The agreement covers 12 nations comprising 40 percent of the world’s economy. Most importantly, it includes Japan.
Major tariffs will be removed in stages. Japan, for example, will cut its tariff on wheat for human consumption by 45 percent over eight years.
A 15 percent tariff on canola oil will be dropped over five years in Japan and Vietnam. Tariffs on Canadian beef exported to Japan will drop from 38.5 percent to nine percent over 15 years. Tariffs on Canadian pork exported to Japan will be reduced or eliminated over 10 years.
So much opportunity.
Canada exported $4.4 billion in agriculture goods annully to Japan from 2012 to 2014. It’s estimated that exports to Japan could triple.
Grain and oilseed farmers say the deal could be worth $1 billion a year in their export areas. Beef exports could triple to $300 million to Japan alone. Canola producers say increased access to Japan and Vietman could mean a $780 million boost to exports.
As well, more access to markets for pork could also boost domestic demand for feed barley.
The reaction from the supply management sector has largely been one of relief rather than hurt. Some producer groups said the uncertainty created by the news blackout during negotiations was worse than what came out of the deal.
Outgoing prime minister Stephen Harper said when the agreement was announced that “there will be no losses in the (supply management) sector” as a result of the deal, though some farmers tweeted those who believe that could send along cheques for 3.25 percent of their annual revenue if they considered that no loss.
However, the compensation to the supply management sector is healthy.
The 12 countries involved, including Canada’s Liberal government, must still ratify the deal. The text of the agreement has yet to be released publicly. Only then will all sides be satisfied that what they’ve been told is the whole story.