The federal government has announced it will make $1.75 billion available to Canada’s dairy farmers, compensating producers for losses in domestic market access due to new trade agreements.
Unveiling the compensation package last week in Compton, Que., Agriculture Minister Marie-Claude Bibeau said the dollars will be doled out over eight years to the country’s nearly 11,000 dairy farmers.
She said in the first year of the program, $345 million will be paid in the form of direct payments through the Canadian Dairy Commission.
Amounts will vary depending on a producer’s quota, she said. For instance, an operator with 80 cows will be given $28,000 in the first year.
The compensation is a result of Canada ratifying the Canada-European Union Comprehensive Economic and Trade Agreement and the Comprehensive and Progressive Agreement for Trans- Pacific Partnership.
“Today’s announcement shows how much our government respects our producers and believes in the supply management system,” Bibeau said in a news release.
“As promised, the compensation is deployed fully and fairly to allow everyone to make the best decisions based on the new market realities and their respective situations.”
While dairy farmers have welcomed compensation, it’s never been something they wanted in the first place.
They have long been concerned about losing their domestic market, arguing that the dismantling of supply management would make them less profitable and potentially decimate the industry.
“While we are grateful for today’s announcement, we would have preferred no concessions to our domestic dairy production,” said Dairy Farmers of Canada president Pierre Lampron, who is a dairy farmer from St. Boniface, Que.
He hopes the Liberals don’t further concede domestic dairy production, which is a promise that Prime Minister Justin Trudeau has made.
“There is no doubt that conceding part of our domestic dairy market has had a major impact on the livelihoods of dairy producers,” Lampron said.
The federal Conservatives have accused the Liberals of not acting quickly enough on delivering the funding.
In a news release, Conservative Agriculture critic Luc Berthold said it’s shameful the Liberals took so long to deliver the plan that the previous government had already put in place.
“The reason the Trudeau Liberals are announcing this support today is not because they support Canada’s supply managed sectors, but because the federal election is just weeks away,” he said.
“If Justin Trudeau really supported Canada’s supply managed sectors, he would have announced compensation years ago, not right before an election, and when he and his government are mired in scandal.”
The compensation doesn’t yet cover dairy losses from the new NAFTA agreement, given it has not yet been ratified, though Bibeau said the government is committed to supporting dairy farmers impacted by it.
Tom Koostra, a dairy farmer from Ponoka, Alta. and chair of Alberta Milk, said even though mitigation is helpful, farmers are frustrated because both the Conservative and Liberal governments have conceded some of the domestic market.
“The Canadian supply managed system is based on the principle of producing according to the Canadian requirements,” he said. “Any time we give up more market access under these trade agreements, that equation is compromised.”
He said supply management is important for the dairy farmers and the economy.
“The Canadian industry is fairly stable; we aren’t subject to the volatility that comes with producing in a global market,” he said. “That stability helps the dairy producer, the dairy processor and, I would argue, it helps the economy of rural Canada.”
David Wiens, a dairy farmer near Grunthal, Man. and the chair of the Dairy Farmers of Manitoba and vice-president of the Dairy Farmers of Canada, also welcomed the funds, but said he hopes no more concessions are made.
He re-iterated the importance of supply management, saying it has kept Canada’s dairy industry strong. In the United States and in other countries, farms are shuttering or seeing fewer returns due to oversupply and lower demand.
“Supply management works for farmers, creates stability and allows us to produce milk throughout the year on a very even basis,” he said. “It provides high quality and we have the highest standards in the world. This is what the model affords us.”
Some consumer groups, however, have expressed opposition to the compensation plan.
The Consumer Choice Centre, a United States-based organization that says it represents 100 countries, characterized the compensation as a slap in the face to consumers.
It said in a news release that the federal government should be opening the dairy market to international products, arguing that ending supply management would benefit the country and save consumers money.