The powerful Quebec wing of the national dairy farmer lobby argues that dairy pricing should be based on farmer financial needs alone, and not take account of arguments from processors and retailers that prices are getting too high.
“If we consult buyers to ask them what is a fair price for milk, there is no way they will tell us the prices should be higher,” one Quebec delegate said during a heated debate at the Dairy Farmers of Canada annual policy convention.
“It doesn’t make sense to have consultation.”
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At issue was the Canadian Dairy Commission practice of speaking with processors, retailers and consumers, as well as DFC, before deciding in December on a support price for the coming year.
Virtually every year, the CDC announces a price lower than dairy farmers said was needed, often citing fears from buyers that higher prices will make their sector less competitive. In fact, processors and retailers have complained that CDC gives too much weight to farmer arguments.
During the Jan. 23 debate, Quebec delegates tried to change DFC policy to insist that consultations with other industry players not be considered during pricing.
Other delegates argued against that.
“Making decisions in isolation from other stakeholders may not serve producers all that well,” said Wally Smith of Chemainus, B.C.
In the end, delegates agreed to leave policy mute on the issue of consultations, but to insist that the CDC base its pricing decisions only on the goal of making sure at least half of producers see their full costs covered by revenue. It was a promise made by the CDC last year, to be accomplished by 2006.
During the convention, a number of Quebec delegates made it clear they did not think that was fast enough.
When new CDC chair and former DFC president John Core made his first appearance before his former comrades, he was given a reception that was occasionally hostile.
He told the farmers that the 2003 increase of 3.9 percent was a major step toward closing the gap between what farmers received last year and what it would take to cover costs of half the producers. He said it closes 37.5 percent of the gap and was a “dramatic departure” in farmers’ favour from the traditional pricing formula.
Core angered some in the audience by urging them to consider whether pressing for higher prices after 2006 is a good strategy.
“There are a number of producers who are concerned about what impact that price has on demand,” said the CDC chair. “A number of industry observers and stakeholders have stated clearly that some of your customers change recipes or introduce more non-dairy substitutes as prices rise. This cannot be ignored.”
The caution about prices getting too high provoked one Quebec delegate to warn: “There won’t be any products at any price. We can’t work at a loss.”
At the end of Core’s appearance, DFC vice-president Jean Gregoire could not resist one final shot.
He gave Core a wrapped speaker’s gift and said he hoped it was whole “and not 37.5 percent of a present.” Delegates applauded and laughed.
Core got in the last word. “Even if it is just 37.5 percent, I’ll still say thank you,” he said.
