Dairy Farmers of Canada takes issue | The report is one-sided and contains flawed information, says national leader
Dairy Farmers of Canada is curd-ling over a report released June 21 by former Liberal MP and trade critic Martha Hall Findlay.
She said Canada’s supply management system for dairy products overcharges consumers and interferes with international trade talks.
Hall calls for an end to the 40-year-old system of production controls, import tariffs and cost-of-production pricing.
Wally Smith, president of the national dairy organization, said Hall’s report and pundits in general are not being honest in the debate.
“It’s totally one-sided and they’re just making the arguments from their perspective. We feel that there’s a lot more to the system than what they are giving credit for or doing due diligence in terms of what it really does deliver and how it actually does work,” he said.
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The report raises broader questions for Smith, who is puzzled by the timing and stance of the topic.
“What is it exactly that they are trying to achieve, those that would simply see the end of supply management.”
Smith said the report is flawed with misleading data suggesting that four litres of milk cost $9.60 in Canada. He understands Hall has since done a mea culpa about the total accuracy of this statement.
“If she doesn’t have that accurate, how can the rest of her report have credibility?” he said.
The July issue of the Milk Bulletin, a monthly newsletter published by the Dairy Farmers of Ontario, describes several details about the milk and trade debate.
Dairy producers in the United States receive substantial government subsidies, which do not exist in Canada. American subsidies paid to support milk production add up to $1.25 per gallon of milk, which works out to more than $500,000 when calculated on a per-farm basis.
“In spite of their government support, farmers there are not doing very well and here we have no government subsidy whatsoever, we get a fair return from the marketplace and we’re eking out a pretty fair and reasonable return,” he said.
Deregulating dairy does not lower prices for consumers and Smith cites countries like the United Kingdom and New Zealand that dismantled their quota systems.
“There’s a huge campaign against the retailer, the cost of production actually went up and the price that the farmers receive went down.
“Prices for consumers in the U.K. have either stayed the same or gone up but farmer’s price at the farmgate for the same product has dropped dramatically since they got rid of their quota system.”
Smith said dairy is one of the top economic drivers in agriculture in seven of the 10 provinces.
“That’s pretty significant. Supply management is a benefit to rural economies throughout the country and not just limited to one or two regions.”
He points out that the cost of production varies widely throughout the country.
“Even though we contribute economically to rural economies, the returns to farmers do vary, but we still manage to get a fair return from the marketplace, which allows us to stay in business where we choose to farm.”
Dairy trade into Canada is already much higher than both the U.S. and EU.
“Canada has gone above and beyond in opening its market to im-ported products. We are very close to the five percent, which means there are all kinds of products from around the world that are imported into Canada.”
He cites examples such as New Zealand butter and cheese from Europe.
“If every country would be as open with their market access provisions according to the WTO as Canada has been in dairy, the world would certainly be looking a little different than it does today.”
Smith said many dairy farms are family run and the trend has been to incorporate the operations of them for legal and business reasons. He said there’s been an effort to mislead the public that these farms are large, faceless corporations.
“To simply take that and misguide the public and says farms are corporations, that is totally false and misleading,” he said. “We’re not corporations, we’re incorporated and I think there’s a significant difference in that statement.”
