In a world of trade liberalization agreements, Canada’s tariff-protected dairy industry can only decline, says the leader of a small group of Ontario dairy farmers trying to operate an export business outside the controlled system.
Chris Birch is president of the 25-member, non-quota Georgian Bay Milk Co. Ltd., which sells raw milk and dairy product to the United States in defiance of Ontario’s regulated dairy system. He told MPs on the House of Commons agriculture committee Nov. 4 that dairy industry expansion can come only through exports.
Since World Trade Organization rulings say quota-holding dairy farmers are selling illegal subsidized product when they export, he said the only option is the Georgian Bay model of farmers without domestic quota exporting on contract.
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“Let’s stop pretending that supply management and its 300 percent tariff barriers is a viable long-term business model for Canada’s dairy industry,” said Birch, who is now in court to try to win a reprieve from an attempt by Dairy Farmers of Ontario to put him out of business.
“I do not think that politicians or dairy leaders are doing dairy farmers any favours by continuing to tell them what they want to hear.”
Birch and his 24 Georgian Bay colleagues have no quota and sell milk at reduced prices to U.S. processors or to Canadian processors who export the product. They say they can make money at lower prices because they do not have the cost of quota.
Birch, who once held quota but sold it because he says dairy returns did not allow him to service the resulting debt, said he would have to pay more than $1 million to buy quota that would allow his operation to exist in the domestic market.
He said last year’s WTO ruling against Canadian dairy exports affected only farmers with quota and access to the high-priced domestic market, but not non-quota holders.
