Canada’s dairy farmer lobby last week complained that a wrong decision by a Revenue Canada bureaucrat is undermining supply management and costing farmers close to $50 million.
Farmers appeared before the House of Commons agriculture committee to demand that the government reverse the decision.
“Canada’s milk producers are hurting,” said John Core of Ontario, first vice-president of the Dairy Farmers of Canada lobby group. “They expect government to respond.”
They want the government to put a product, a butteroil-sugar combination used to make lower quality ice cream, into a tariff classification that will impose supply management protection.
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The 8,500 tonnes of blended imports this year from the United States, New Zealand, Mexico and the European Union displace fresh cream used by Canadian ice cream makers and force dairy boards to reduce quota.
Dairy representatives predicted the imports will grow, to be used in other products, once manufacturers realize they can circumvent supply management import controls.
Importers of the mixture, which contains just under 50 percent butteroil so it is not classified as a dairy product, had a different story.
They argued the blend is cheaper than domestic cream, makes them more competitive, is a small item in a much larger industry and will not grow much beyond 10,000 tonnes.
The reaction dairy farmers received to their plea was mixed.
An array of bureaucrats from Revenue Canada, foreign affairs, finance and Agriculture Canada warned that any government decision to put tariffs on a product that now enters the country tariff-free will bring trade retaliation from other countries.
Revenue Canada official Phil McLester said he will study DFC documents and arguments again, but believes his 1995 decision to classify the butteroil and sugar mix as a non-protected product was correct.
Political reaction was also mixed.
Reform trade critic Charlie Penson told farmer representatives that instead of trying to increase protection against competition, the dairy industry should be trying to win export markets.
Jean-Guy ChrŽtien of the Bloc QuŽbecois took up the farmers’ side, agreeing this was a product created for the sole purpose of getting around supply management. A bureaucratic mistake had been made that should be corrected.
BST case made
The Liberals were less adamant, although Ontario MP Rose-Marie Ur jumped on a suggestion from ChrŽtien that the product being imported from the U.S. could be from dairy herds injected with bovine somatotropin, which is banned for sale in Canada.
She said the health department should be called to testify.
In the end, no decisions were made and the dairy farmers had no indication whether they would see any progress in their three-year battle against what they view as a growing import threat.
