Dairy Farmers of Canada says it is pleased with the compensation package that will mitigate the effects of imports
Federal agriculture minister Gerry Ritz said he isn’t surprised that there has been little outcry from supply managed farmers since the Trans-Pacific Partnership trade deal was announced.
“We did exactly what we said we would do, and they trust us to deliver that,” he said.
There was much speculation leading up to the deal about how much market access Canada would give up and whether the TPP would spell the end of supply management.
In the end, the deal granted 3.25 percent market access for dairy, 2.3 percent for eggs, 2.1 percent for chicken, two percent for turkey and 1.5 percent for broiler hatching eggs.
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federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
The access is reciprocal, and Ritz said some producers are looking forward to exporting Canadian products.
“There’s already some artisan cheese producers on the East Coast and through Quebec and Ontario that are quite excited about having that same volume availability back into the TPP jurisdictions,” he said.
Canada was able to retain its cheese compositional standards, even though it entered the discussions in 2012 after that text was written, Ritz said.
He said 85 percent of the fluid milk and butter that will be coming into Canada will go into further processing rather than onto store shelves.
However, further details of the deal remain scarce, and the muted reaction could be a result of that.
The dairy industry has already been struggling against what economist Al Mussell called unchecked imports of milk protein isolates from the United States.
“In terms of the day-to-day, this is a much bigger issue than the TPP,” he said from the Guelph, Ont., office of Agri-Food Economic Systems before the TPP was an-nounced.
“The market is already swimming in non-fat solids.”
Dairy Farmers of Canada president Wally Smith said the country’s 12,000 dairy farmers would have preferred that no additional market access be granted.
In a blog posting, Smith said DFC is still analyzing what the deal means, but he estimated the lost market opportunity at more than $200 million per year.
Losses under the Comprehensive Economic and Trade Agreement with Europe were estimated at $100 million to $150 million.
“We recognize that our government fought hard against other countries’ demands and have lessened the burden by announcing mitigation measures and what seems to be a fair compensation package,” he said in a news release.
“We have come a long way from the threat of eliminating supply management.”
Ritz said dairy farmers will retain 92 percent of the domestic marketplace.
Canada has been importing a significant amount of poultry for years and is better positioned for exports, he added.
Meanwhile, the compensation program announced Oct. 5 in conjunction with the TPP was in the works even before the European deal was reached a year ago, Ritz said.
The $4.3 billion in programs an-nounced last week will mitigate the effects of both deals.
The 15 year income guarantee program will make annual payments of $11,000 to a typical dairy farm, $5,600 to a chicken farm, $5,867 to a turkey farm, $4,767 to an egg farm and $12,780 to a hatching egg farm.
The quota value guarantee program, which is to be developed with the industry, the Canadian Dairy Commission and the Farm Products Council of Canada, will be available for 10 years.
“We wanted to make sure that the lending institutions which have monetized the value of quota and are using it as collateral against new barns and expansions, to make sure that they’re secure and that that quota is not going to dive,” Ritz said.
A seven-year program for processor modernization, worth $450 million, and a $15 million market development initiative were also announced.
Exporters who were in favour of the TPP should see gains in countries such as Malaysia and Vietnam, where pork and grain are in demand, Ritz said.
“Japan will be the crown jewel for everyone in this TPP negotiation. It always has been,” he said.
