American dairy farmers continue to benefit from broad agriculture supports, a study shows.
Dairy Farmers of Canada has had Grey, Clark, Shih and Associates regularly study the effects of American policy on dairy farms in the United States.
The latest data were released at the recent Dairy Farmers of Canada Policy Conference in Ottawa.
It showed that American dairy farmers benefit from the equivalent of US$12.06 per hundredweight or C$35.02 per hectolitre (35.02 cents per litre). That’s close to 70 percent of what farmers are paid now for their milk.
Peter Clark, a long-time trade consultant and lawyer, said at the conference that the U.S. is gradually moving more of its programs toward risk management.
“The U.S. has become aware of the WTO (World Trade Organization) inconsistency of many of their programs,” said Clark. “They’re shifting from direct and countercyclical payments and other issues to various types of insurance programs.”
Clark’s 500-page report does not represent actual support funds paid to U.S. dairies, but it analyzes many programs and then allocates a certain amount of funds from those programs to the potential use by dairy farmers,
The programs include: domestic support, export subsidies, conservation programs, crop and livestock gross margin, risk management programs, disaster relief assistance programs, loan programs, crop insurance, livestock support, renewable fuels incentives and subsidies, and irrigation programs.
Nick Thurler, a Dairy Farmers of Ontario board member from eastern Ontario said that he knows numerous dairy farmers across the border in New York.
“I know if I told them they got $12 per cwt. subsidy, I know what the answer would be,” he said.
Clark says he’s heard from people who say they know American farmers who get no direct subsidies, but he points out that the subsidies are mostly indirect and farmers in the western U.S. have much greater benefit due to irrigation. Clark says that alfalfa and forages are the biggest users of irrigation water, mostly to feed dairy cattle and hence the massive amount of money that goes into irrigation systems.
“We look at what is available” to dairy farmers, said Clark. That’s typical of trade evaluations done by other countries as well, he says. Clark’s study included the impact of nutrition programs in the U.S. on dairy products.
“Some argue it should be seen as welfare and we shouldn’t be allocating it in this analysis,” he says, but he includes it because the original program was created as a way to deal with excess agriculture production.
Clark says that American Trade Representative Robert Lighthizer’s lawyers have reports that list 160 subsidies on Canadian steel.
“When it comes to trade, you have to be precise.”