The president of Canada’s dairy processing industry is adding his voice to calls by consumers and retailers for an overhaul of the Canadian Dairy Commission.
“I think my members are very concerned about issues of transparency and consistency in the way dairy prices are set and we certainly are concerned about the potential market impact of these regular, and this year significant, price increases,” said Don Jarvis, president of the Dairy Processing Association of Canada.
He joined other groups in calling for the reinstatement of a consultative committee called for in the commission’s legislation but allowed to lapse a decade ago. In 2000, the federal auditor general called on the dairy commission to create a permanent consultative committee.
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“I do think we need more oversight there,” said Jarvis.
The Consumers’ Association of Canada has complained that the commission’s annual consultation before a pricing decision is made is a sham, since industry and consumer views were presented just a day before this year’s 7.8 percent increase in butter and skim milk powder support prices were announced Dec. 10.
Consumers’ group president Bruce Cran said the commission is too much influenced by the dairy farmer lobby for higher prices since two of three commissioners are former presidents of Dairy Farmers of Canada.
For his part, agriculture minister Andy Mitchell stopped well short last week of promising a review at the dairy commission. He said he had not heard a lot of criticism about the commission but promised to give the critics a hearing.
“I’ll obviously listen to input from people, Canadians in general and the industry as well,” he said Dec. 15. “But I’ll be honest with you. I have not had a lot of direct engagement on that. I haven’t heard a lot from folks.”
He did not directly respond to a question about whether changes are needed or whether critics are correct that there is a perception of bias toward the producer side because of the presence of former DFC presidents.
In fact, while DFC praised this year’s large increase, it has in the past complained that the dairy commission is not sensitive enough to farmer income needs.
At the processors’ lobby, Jarvis said the minister has had at least one industry complaint about the commission.
On Oct. 20, he wrote to Mitchell requesting immediate action on a request to reconstitute the consultative committee.
The minister also received a copy of a processor letter sent to dairy commission chair John Core worrying about the impact on consumer demand of continuous price increases.
“Canada’s dairy processors want efficient dairy producers to continue to obtain a fair return on their labour and investment,” Jarvis wrote. “However, this can only be achieved if the continued trending of prices upwards does not eventually end up seriously discouraging consumer purchases of dairy products and ingredients. Such a scenario would ultimately negatively impact producers along with processors and the Canadian dairy sector as a whole.”
Jarvis said this year’s increase of almost eight percent might have that impact.
The dairy commission also included a 3.9 percent increase in processor margin in the announcement. Jarvis said his companies welcome the adjustment.
