Canada’s consumer lobby is considering a court challenge next year to try and force changes at the Canadian Dairy Commission after the commission announced a sharp increase in dairy prices beginning Feb. 1.
“The Canadian Dairy Commission is a captive of the dairy industry,” said Bruce Cran, president of the Consumers Association of Canada, in a Dec. 13 interview from British Columbia.
“We have absolutely no faith in the process at all. At an executive meeting on the weekend, we agreed to look at all options in the new year, including court, since our official presentations are never listened to.”
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Higher support prices for skim milk powder and butter announced Dec. 10 will translate into an increase of five cents per litre for farmers, a 7.8 percent boost. Processors also receive a margin boost of 3.9 percent.
The restaurant industry said that represents an increase to retailers of almost 12 percent.
The CDC said the increase was meant to increase the number of dairy farmers who cover their full costs of production from dairy revenues, plus a 1.66 cent-per-litre increase to offset some costs from BSE.
After a year, the BSE add-on will be “re-evaluated,” said the commission.
Dairy Farmers of Canada had asked for more but praised the increase.
“Dairy farmers have dealt with increasing costs and the loss of farm income from BSE for more than 18 months now,” DFC president Jacques Laforge said in a statement issued from DFC Ottawa offices. “Under similar conditions, other businesses would have already increased prices to cover their lost income. The decision of the Canadian Dairy Commission will help average dairy farmers.”
Laforge said it also means Canadian consumers will continue to have a reliable supply of dairy products.
But Stephanie Jones, president of the Toronto-based Canadian Restaurant and Foodservices Association, said the cost is too high.
The CRFA delivered more than 3,000 petitions to the dairy commission on Dec. 9 from restaurant operators warning that an increase in prices would be unacceptable and would lead to a decline in use of dairy products on retail items, such as pizza.
On Dec. 13, the executive of the association was meeting to discuss the impact of the increase.
“The cost-of-production formula on which prices are supposed to be based shows a decline in costs and that should have led to a price decline or at least no change,” she said. “This increase is disappointing and it will change how we do business.”
Jones said the CRFA, like other critics, would be more vigorous in trying to force reforms to the diary commission. “We will support any group mounting a challenge.”
At the consumers’ association, Cran said it is too early to predict what type of court challenge could be launched but he said areas of investigation include whether the dairy commission is living within its mandate to consider the interests of consumers, as well as producers, why there is no oversight committee as recommended by the auditor general and whether the fact that two of three dairy commissioners are former dairy farmer presidents creates a bias and conflict of interest.
He said consumer views were not considered, since they met the CDC Dec. 9 and the decision was announced Dec. 10. Higher prices penalize consumers.
“I got the impression from the second I walked in that the decision had already been made,” he said. “The consultation was a farce.”
