Manitoba dairy producers have quietly laid to rest a company they designed to set up export contracts between farmers and processors.
Last week, they dissolved the four-month-old Manitoba Commercial Milk Export Corp.
Federal trade experts rejected the corporation, explaining export competitors would not see it as independent enough from Manitoba Milk Producers.
The corporation was created in the wake of an October 1999 World Trade Organization judgment that the Canadian dairy system’s old export policy was an illegal subsidy. The WTO ruled marketing boards must not have any involvement in dairy exports.
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Bill Swan, chair of the marketing board, said he believed the corporation was legally far enough removed from Manitoba Milk Producers.
But Canadian trade officials said the corporation “didn’t pass the smell test,” said Swan.
While trade officials asked a number of provincial export systems to make changes to ensure compliance with the WTO ruling, Manitoba was the only province that had to start from scratch.
Swan explained Manitoba farmers who want to export milk will now use a system adopted by Ontario dairy producers.
They will find out about contracts through a Toronto call centre operated by consultants Deloitte and Touche.
The failed corporation will cost exporting dairy producers about $15,000.
But Swan said the system provides better price discovery than one used by dairy farmers in the rest of Western Canada.
Processors in British Columbia, Alberta and Saskatchewan have a list of dairy producers to whom they may mail contract offers.
All Manitoba farmers will receive notice of contracts from Deloitte and Touche by mail once a month, and can call a toll-free number to sign up for opportunities.
