Canada’s supply managed dairy sector should be an example to those struggling with depressed world milk prices, said Dairy Farmers of Canada president Jacques Laforge.
As producers in other countries sell their milk at below the cost of production, Canadian farmers enjoy price and production stability.
That should strengthen the argument for supply management at world trade negotiations, he said.
Speaking in Regina at the DFC annual general meeting, Laforge said if other countries developed ways to manage their production and not create surpluses, they could avoid the crisis.
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“Right now, all the other dairy farmers across the world are in a deep mess,” he told the meeting.
He described the situation in the United States as “heartbreaking,” because producers can’t cover their cash costs.
“U.S. farmers right now are talking about some kind of supply management system,” he told reporters, adding that European dairy farmers are also looking at the idea.
“Thirty months ago, dairy prices around the world were as high as Canada’s,” he said. “They’ve dropped down by two-thirds. Farmers cannot survive that.”
Laforge said DFC will continue to defend the system at World Trade Organization talks.
Although Canada said supply management is not on the table, officials like Laforge worry that they will lose tools such as import controls and tariffs that allow supply management to be successful.
He said Canada needs “a very good strategy.”
“We must not go back to Geneva like we did last time,” he said. “There was no clear strategy except keeping the right language.”
Laforge said the supply managed sectors need to steer federal agriculture minister Gerry Ritz.
“Otherwise our dairy industry will look like all the others.”
Vice-president Wally Smith, in his report from the board, told the meeting that the current WTO proposal is detrimental to dairy producers.
“The proposal would make the Canadian dairy industry more vulnerable to international market volatility, which many experts believe will continue to worsen,” he said.
One international organization estimates that only 10 percent of the world’s milk can be produced at current prices.
Laforge, a New Brunswick producer who was re-elected for a third term during the meeting, said tension among countries at the WTO makes a deal seem almost impossible.
At the same time, Canada must be prepared.
“For us, if we never have a deal, we don’t mind because this deal is no good for Canada.”
Under the current agreement for market access, Canada imports about 10 percent of dairy products.
