Lack of dairy compensation upsets processors

The processing sector was expecting to be included in the compensation package announced for dairy producers

Processors say they were left out of the dairy trade compensation package announced last month but haven’t been given a reason why.

Mathieu Frigon, chief executive officer of the Dairy Processors Association of Canada, said processors comprised half of the working group that worked with the government to develop the program yet their requests were ignored.

He pointed to numerous public statements that indicated the government’s intention to compensate processors.

“We were expecting, not only based on the work of the working group but on the public statements from the minister, that there would be an announcement for dairy farmers and dairy processors,” he said in an interview.

Federal Agriculture Minister Marie-Claude Bibeau announced in August that dairy farmers would share $1.75 billion over eight years to help them deal with market share losses from trade agreements with Europe and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

It does not include anything for future losses from a new North American trade deal.

DPAC, the Western Dairy Council, the Ontario Dairy Council and the Conseil des Industriels Laitiers du Quebec all said they are disappointed the government has reneged on its promise to help them, too.

Frigon said processors wanted two things: an investment program and tariff rate quota licences.

An investment program would help the industry modernize and be more competitive in the face of increasing imports, he said.

Processors have been allocated some of the TRQ licences to import under the trade deals but Frigon said that won’t help all of them. Some processors are too small and some make products that would make them ineligible for a licence, he said.

Processors got 80 to 85 percent of the licences available under CPTPP but only 45 percent under the Comprehensive Economic and Trade Agreement.

“We had a very good outcome on CPTPP for import licences but it was a temporary decision so it’s subject to review,” he explained. “The CETA allocation was extremely disappointing for us.”

Under CETA, processors also got $100 million in an investment fund.

Processors had asked for an additional $365 million for all processors under supply management, not just dairy.

In an emailed statement, Bibeau said the government supports processors and noted the $100 million investment.

She said the government has committed up to $3.9 billion for producers in the supply-managed sectors, including $2.4 billion to sustain incomes and $1.5 billion for a quota value guarantee program.

“We continue to work diligently with the other supply-managed sectors, and processors, to evaluate the impact on their businesses and to determine the compensation mechanisms that best suit their needs. We continue to have productive discussions and are working closely with the industry representatives and we remain committed to deliver this compensation as soon as possible.”

Frigon said with the election campaign looming he doesn’t expect any further announcements.

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