QUEBEC CITY — Canada’s 34,000 dairy farmers have entered what promises to be their most unsettled political year since supply management was created a quarter century ago.
They must try to reinvent supply management, rewrite the rules on controlling production and pricing of their $3 billion product and learn to live in a commercial climate made less certain by recent trade deals.
But more fundamentally, said industry leaders last week at the annual meeting of Dairy Farmers of Canada (DFC), producers must decide if they still want orderly marketing.
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“Reforming the structure is something we must do for the long term,” Manitoba dairyman and former DFC president Louis Balcaen told the convention during an appeal for unity. “Orderly marketing is very fragile, more fragile than we may think. And there can be no middle ground — either we have orderly marketing or we don’t.”
DFC president Peter Oosterhoff said it was not an idle concern. To meet processor demands for American-competitive prices, a greater portion of the milk sold will have to be priced lower, reducing returns in what has become a high-cost business.
Disrupt marketing boards
Federal-provincial commitments to remove internal barriers could allow greater movement of milk across provincial borders and disrupt provincial marketing board efforts to serve their own markets.
And ongoing attempts by the Americans to gain greater access to Canadian ice cream and frozen yogurt markets could affect returns.
“There are producers who don’t realize what the old boom-and-bust cycle was like,” Oosterhoff said in an interview after the convention. “They don’t think they need the production disciplines or price controls. They think they can compete. But if they lose the system, they will find chaos.”
It led to a warning from agriculture minister Ralph Goodale that the system could collapse unless farmers and processors agree to work together. What is needed, he said, is “an equitable system for the future, a system that is sufficiently flexible to respond to market forces and is in conformity with the new rules of the GATT.”
Angry delegates threw their own challenge at Goodale: Don’t make any compromises with the Americans that will reduce tariff levels. And don’t follow through with a promise by the previous Conservative government to cut another five percent from the federal dairy subsidy this year.
Goodale made no commitments.
