OTTAWA – Canadian consumers should compensate dairy farmers for the loss of their $160 million annual federal subsidy, agriculture minister Ralph Goodale said last week.
Under attack from a Bloc QuŽbecois MP for cutting the subsidy, Goodale indicated he favored an increase in dairy product prices to make up the lost subsidy.
It is a position the dairy farmer lobby will argue before the Canadian Dairy Commission as it sets prices paid by dairies for the milk they buy from farmers.
If dairies are charged more for the milk they buy, some of that increase will be passed on to consumers.
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“Over the last 10 years or so, the general inflation rate with respect to food products in Canada has been in the order of 30 percent,” Goodale said in the Commons. “By contrast, the inflation rate with respect to dairy products has been only in the neighborhood of 16 percent, which indicates there is some room for price adjustment.”
BQ MP Jean Landry argued Goodale and the federal government were being unfair to Quebec farmers by cutting the dairy subsidy without compensation.
The BQ has said the five-year phase-out of the dairy subsidy without compensation is unfair compared with the government decision to pay $1.6 billion in compensation last year to prairie grain farmers who lost their transportation subsidy.
Goodale said while dairy farm organization leaders opposed losing the subsidy, once it was clear the subsidy would disappear, they preferred a five year phase-out to an abrupt end, even with compensation.
