Special compensation gives dairy sector ‘bad image’

Canadian dairy farmers will receive approximately $2.9 billion for domestic market losses associated with the Trans-Pacific Partnership trade deal.

A Manitoba farmer says the optics of the federal compensation package send the “wrong message” to consumers.

Steven Boerchers, a dairy farmer from Beausejour, Man., is worried the compensation looks like a government handout. He believes the government money should support Canada’s dairy industry rather than individual farmers.

“I’d rather send monies in different directions rather than taking (it) personally for our farm,” Boerchers said in an interview during the Dairy Farmers of Manitoba conference, held in Winnipeg in December.

“There are enough holes in the industry that could be plugged with some money, to do some good things.”

Based on the text of the TPP, participant countries will gain duty free access to 3.25 percent of Canada’s dairy market. In early October, the federal government an-nounced a financial package to compensate dairy farmers for the loss.

“The compensation for the entire supply management system is $4.3 billion…. The bulk of it, $2.9 billion, comes to dairy farmers,” said Wally Smith, Dairy Farmers of Canada president.

Under the deal, Canadian dairy farmers will receive direct compensation for 15 years.

Boerchers said farmers began contacting him shortly after the government announced the TPP compensation.

“I was getting phone calls and text messages from other farmers and people in the ag community (saying), ‘oh, I hear you guys get to live another 15 years and you get a cheque to boot.’ ”

Boerchers was so concerned about the optics of the deal that he brought a resolution to the DFM meeting, asking Dairy Farmers of Canada to use the compensation to enhance dairy processing capacity and border controls in Canada.

“I think some people will view this as the government giving us free money. Really it’s not…. I want there to be a clear message that we are self-sufficient.”

Smith said he’s heard concerns about the optics of the compensation package but not public comments.

“I’ve heard it privately. I’ve never seen it in the form of a resolution or brought forward at a public meeting,” Smith told reporters at the Winnipeg meeting.

He said the compensation is not a handout or a subsidy.

“It’s not a payment that’s going to top up a low milk price. It is a direct cost to government for the price they had to pay to expropriate some of (dairy farmers’) property so they could successfully conclude the TPP round.”

Smith said production quota has immense value for dairy farmers, and the federal government, with the TPP deal, “expropriated” a piece of that asset.

“We were successful in telling the government that if you’re going to expropriate one of our key and most critical assets, there has to be a cost attached to that,” he said.

“I am very proud that … we have been able to extract a commitment that is going to mean no negative impact for at least 15 years on your farm, with respect to cash flow.”

Smith spoke with Boerchers at the Winnipeg meeting and said he admires Boerchers’ commitment and passion for dairy farming. However, he said the young Manitoba farmer should focus his energy on issues that are more critical for Canada’s dairy industry.

Boerchers said the conversation did alter his perspective but didn’t change his mind.

“I see (his) side of it quite a bit more, (but) I still have my concerns,” he said. “It’s a bad image … for farmers to be cashing government cheques.”

About 20 producers supported the resolution, but it was defeated.

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