Dairy 'sellout' becomes key rural election issue

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It is only an issue to those who are reaping the rewards of the closed system . The number of votes is very small .
Now on the other hand does the US want the border opened up ?
Story in the Farmers Forum makes one think not .

When, as noted in the Ontario Farmer by Ian Cumming, duty-free imports of dairy products are rapidly-growing, and with no end in sight, to now around $1 billion annually, supply management doesn't need TPP to end it, it's already happening, by the truckload, every day.

What's ironic is that Cumming also notes that US dairy farmers, at least in the short term and in his area of upstate New York, love supply management because they're able to be a big part of the $1 billion in annual dairy sales to Canada that they wouldn't make if supply management ended.

What must be deliciously-ironic for Cumming is that because of these tariff-free imports by Canadian dairy processors, he is still making money from supply management even though he sold his quota and moved his dairy operation to the US.

Canadian processors are also laughing all the way to the bank because they can buy dairy product at world prices, process it and sell it at much-higher Canadian prices, thereby dealing greedy supply managed dairy farmers right out of the loop.

Ritz knows full-well that supply management will soon asphyxiate itself because of the inability of the dairy industry to come to grips with the fact that with the import protection pillar in ruins, it's all over.

And, as might be expected, dairy farmers are going after the wrong prize in the upcoming election - instead of trying to defend supply management, they should be voting for whatever party offers the best compensation package.

As always, my views may not be the views of any organization with which I am affiliated.

Stephen Thompson, Clinton ON

Me thinks you misread Ian . There would then be a two way border and they fear imports to their side .

Me thoughts are me own and don't need to scrutinized by others because I stand up at meetings and ask the hard questions . Do you , or will you ask what the views of those who you represent really is ? If not then you are nothing more than a steer in a pasture full of breeding age heifers !

As always. anonymous postings aren't worth the electrons they are printed on.

I didn't mis-read Mr. Cumming at all - US dairy producers in his part of the country are rubbing their hands with glee at the thought of all those rapidly-increasing duty-free imports Canada is making, and will make more of unless and/or until supply management topples under the weight of its own sheer incompetence.

The end of supply management will end that gravy boat for both Canadian processors and US farmers.

If you don't believe me, Mr. Cumming is easy to find - ask him yourself!

Again, my views may not be the views of any organization with which I am affiliated.

Stephen Thompson, Clinton ON

You are laughable for not asking the question if you so believe you are right but then you are making a mockery ( well a bigger one ) of the org you are supposed to be representing . Why will you not stand up and ask the question rather than using an Ont Pork vote that seems to have gone no where .
Did you hear what the bull said to the steer ..... You go over there and look at them heifers and I'll go over here and breed some .

Me thoughts is me own and I don't need permission or excuses to express them .

I do correspond with Mr. Cumming and have always found his correspondence to be forthright - in this instance, he's bang-on with what is being simultaneously published in Canada's Globe and Mail as well as with what is being published in New Zealand and Australian newspapers.

The fact of the matter is that, at this moment, dairy processors in the US, New Zealand and Australia are torn between trying to torpedo supply management or being part of the almost $1 billion in annual sales (and increasing rapidly) of duty-free dairy product to Canada that they wouldn't be selling if supply management ended.

Therefore, rather than use the meaningless (and rather-stupid) steer and bull analogy, US, New Zealand and Australian dairy interests are making a lot of money giving supply management the ammunition to blow its own brains out, and it is.

My views may not be the views of any organization with which I am affiliated, but then again, somebody has to be up front - nobody else with a name seems to want to do it.

Stephen Thompson, Clinton

Tobacco has been part of Ontario's SM system starting in 1934, revitalized in 1957, and again in 1971. These 81 years should have been more than enough to work out the kinks, and perfect the SM system for flue-cured tobacco.

Economist Larry Martin and Al Mussell of Geo. Morris Centre did a study in 2007 ("The Tobacco Industry Exit Debate: Understanding the Broader Policy Context") pointing out that half the tobacco in Ontario was sold by farmers and others onto the black market. The report challenged politicians to put enforcement action behind their public support for supply management. Ontario twice said it was establishing special police task forces, yet the tobacco black market simply continues to expand. Finally, OFPMC recently stripped many powers from the dysfunctional Tobacco Marketing Board.

For milk and dairy, between 1998 to 2012, the number of Canadian dairy farms has dropped 39.5%, an average drop of 3.63%/yr., halfing and re-halfing every 19 years.

Since New Zealand removed its SM system in 2001, NZ's non-SM dairy system enjoyed 17 times greater growth than Canada's SM dairy system during the same period. Here is the greatest cost to Canada and Canadians; the SM imposed loss of opportunity, prosperity, tax revenue, and jobs; punishing all Canadians so that SM farmers, just 0.05% of all Canadians, can enjoy higher profits and no competition. The potentially available growth that Canada could have had was pissed into the wind by SM's dysfunctional thinking and actions.

Canadians are charged 38% to 300% more for their dairy than what most of the world pays. Is this because Canadian dairy products are so high quality that these high prices are justified?

Think again.

In Canada, SM dairy quality is questionable. For somatic cell counts (ie. puss) in the milk from Jan. to June 2015, Manitoba had the worse milk in Canada, 17% worse than the Canadian average. BC had the best milk, which is 14% better than the Canadian average somatic cell count. The worst month for a Province was 45% more contaminated than the best month.

For bacterial contamination in Canadian milk from Jan. to June 2015, the monthly variability across all Provinces is 48%, which shows an out of control situation, indicating poor dairy management. Nova Scotia had the worse milk, 208% higher bacterial count than the Canadian average. New Brunswick had the best milk, which is 57% lower than the Canadian average bacterial contamination. The worst month for a Province was 13 times worse than the best month. Again, totally out of control. This poor quality milk wasn't dumped, it was sold to unsuspecting consumers. Thank God for pasteurization.

For SM chicken, 30% to 80% of the raw chicken sold at retail stores is contaminated with salmonella, E.coli, campylobacter, listeria, Heidelberg, or other deadly pathogen; and half of those are SuperBugs, resistant to one or more antibiotic, caused or contributed to the antibiotics injected into or force fed to the chickens. This contamination is 10 times worse than what can be consistently achieved with on-farm slaughter by a farmer with a sharp knife.

For those earning Minimum Wage in Ontario, the affordability of chicken has dropped 37% from 1995 to 2005 due to the price gouging of consumers for SM chicken.

During SM's 44 year reign (1965-2015), the number of chicken farms has dropped from 176,818 in 1966 to 20,645 in 2011; an 88% drop overall, or an average drop of 4.9%/yr, halfing and re-halfing every 14 years.

Since 2003, fraudulent "spent chicken" duty free imports to Canada have exploded by members of the SM system and/or their coat tail riders, then sold in Canada as young broiler chicken meat, half as breast meat. In 2012, Canada imported 106 million kilograms of spent fowl from the U.S., which displaced more than 10% of Canadian chicken production, 8,900 jobs and $591 million dollars in GDP contributions.

Spent chicken fraud is getting worse… fast. Those same 106 million kilograms represent a 28% increase in spent fowl imports over 2011 and an overall increase of more than 50% in the past three years. Based on current predictions, fraudulent Spent Chicken imports are on pace to increase another 15% in 2013.

Do these facts prove (or dis-prove) the allegation that SM is helping the Canadian family farms, and the Canadian consumers?

SM is terribly broken and dysfunctional, hurting Canada and Canadians, again and again.

The time for fixing or ending SM is here and now.

Glenn Black, President
Small Flock Poultry Farmers of Canada

Easy for Liberals & NDP to say things when they are not in power, NDP said yesterday they would keep & restore Canada post door to door delivery. I really don't see even the need for it in rural areas anymore .SM will evolve eventually like all things do no matter what opposition says

It might be instructive to try and picture what change might look like. As a background, here are the milk cows and people. Canada, 1 and 35 million. In USA 9 and 350 million. In New Zealand 5 and 5 million (not exact numbers but close enough, I think).
Under SM, I calculate the current margin for dairy farmers might be somewhere in the vicinity of 25 cents/litre (75 cents minus 50 cents in operating expenses). Under global pricing (variable and somewhat unpredictable), the margin might average 5 cents per litre (sometimes negative, sometimes higher). In this situation, to achieve the current farmer-financial reward, the Canadian dairy herd would have to increase to 5 million cows.
Who knows if this is at all possible (I rather doubt it)? It would certainly take time and it would reshape Canadian agriculture considerably. It would also alter global dairy trade. The majority of Cdn free-stall operations could adapt most easily (parlours currently in use for 2-3 h per milking could milk 4-5 as many cows if used 22h/day, just add free-stalls to match). Smaller operations with little non-family labour might be viable with major belt-tightening, but major expansion for these would be more challenging. New entrants would have to sharpen their pencils to be sure the investment might have merit. Beyond this, there needs to be someone to buy and process the milk, and someone to export and resell the milk-products. Currently, I don't see expansion in the latter. China was supposed to be the saviour recently when the EU/NZ and USA were gearing up their exports. But, China proved to be a bit of a no-show recently; and then Russia took a hissy-fit just to make a bad situation worse. Imagine if the milk from an extra 4 million Cdn cows had to be factored in?

I think the best advice to everyone in the TPP dairy discussion might well be: 'be careful what you ask for........'

(1) If, as widely reported, US banks won't lend more than $3,000 per cow to a dairy farmer, Canadian dairy farms, regardless of size, would have a lot of adjusting to do, especially since a good number of Canadian dairy farmers would appear to owe more than that just on their palatial houses which generate no revenue at all.

(2) most people overlook the potential for increased sales of dairy product in Canada once the artificially-high farm gate prices are dismantled - US primary demand continues to increase while Canada's continues to decrease for no other apparent reason than the demand-stifling effect of artificially created farm gate prices.

(3) even if nothing else happens, replacing the almost $1 billion in annual duty-free imports of dairy product with Canadian dairy product would cause a substantial multiplier effect on the Canadian dairy industry and the Canadian economy.

(4) people continue to underestimate the consumer-level multiplier effect of lowered dairy and poultry retail prices (including a substantial reduction in cross-border shopping for dairy and poultry products) as well as the multiplier effect of increased exports of all sorts of goods, including agricultural products.

My views may not be the views of any orgainzation with which I am affiliated, but they'll eventually get there.

Stephen Thompson, Clinton ON

TPP is not about dairy but like many examples on here it has been twisted to be about dairy . Dairy is a small part of any exports from Canada so why should dairy think they are going to control a country where exports are important to the economy ?

IF SM won't or can't survive/compete with out protection then why keep it unless it is put inplace to hold all other sectors back ! When tobacco quota was ended , did the growing of tobacco come to an end ! The only real lesson with tobacco was that a payout for quota was the wrong thing to do .

The dairy sector will never grow in Canada with a TPP deal.Canada cannot compete with processing beef and pork,but somehow we will be able to compete with the U.S. on processing of dairy .Labour and electricity costs are too high in Canada.All the dairy products will be trucked in to Canada.Supply Management is finished with any more cuts, who is Mr.Ritz kidding.

A good article in the Western Producer on the State of Affairs re the TPP. The best info I ve read lately.
Check it out.

" the federal government has spent months working on a compensation package for affected supply management farmers"
This quote is from the article referred to in the Western Producer.
I thought tobacco proved a buyout doesn't work and any big "donation" of taxpayer dollars to SM, after all the years of gouging consumers would wreak havoc with all other farmers and annoy taxpayers...rightfully so.

I have talked to the three major party candidates from my riding . Liderals and NDP were very quick ( when not even asked ) to say that they support SM all though neither said it had be kept in it's current form . Conservative candidate did not bring up SM but did mention how trade and growth in ag trade is important .

SO questions that should be asked are ....
Is it fair to have protection for SM at the cost or negative impact of other Ag sectors ?
Why is SM treated differently from other sectors in Ag ?
SM is Agriculture so would it not be fair for SM to have the same level of support that the rest of Ag gets from our Gov ?
Canada is an export country involved in free trade agreements so why then do we not want to trade and export SM products to increase our GDP ?
If SM is the poster child for Ag in Canada , will your party if elected award the same support and profit level to non SM agriculture that SM enjoys ?

Will CFA , OFA or any individual ask these questions in a public form or will every one just sit back and let SM continue to run the rest of us over ?

In reply to SM Protection http://betterfarming.com/comment/16741#comment-16741

It's hard to understand what SM really wants, needs, or is willing to settle for.

All 2,700 SM farmers already have multi-million dollar net worth. Perhaps they want to go from multi-millionaire to become billionaires. Can Canadians afford the additional $2.7 Trillion dollar price tag to move our 2,700 SM multi-millionaires to Billionaire status?

I had Twitter conversations last week with an Ontario dairy farmer. His Twitter account says he has 4 sons, all of whom want to farm. I assume that one son will get the parent's dairy farm when they retire, but what are the other three sons supposed to do? I'm told the new dairy entrant program is a farce, and the only way for a new farmer to enter SM is to marry it or inherit it. Perhaps all SM farmers expect Canada to buy their offspring a brand new SM farm, one for each kid? Dairy is a little more money that egg, chicken, or turkey; but lets assume it's an average of $6 million per child. Assuming 2.5 children per family, one of whom gets Mom & Pop's farm, buying 1.5 farms for each of the current 2,700 SM farms, that will cost $24.3 Billion. Can Canadians afford that?

When NZ removed their SM system in 2001, their NZ dairy system struggled, but was able to grow 17 times faster than Canada's dairy industry. Instead of SM continuing to milk Canadians, perhaps the government should help them learn how to compete in the real world, rather than their protected and secret garden hidden deep inside the SM world.

Export of Canadian dairy, chicken, and turkey is almost non-existent. If we gained our fair share of the Chicken export market, Canada's chicken industry would have to grow 5 times it's current size. That won't happen immediately, as it's currently feeble and unable to compete, but eventually I'm confident SM chicken farmers will perform.

World dairy exports are about $36 Billion per year. The most that any country can (and should) grab is $18 Billion per year. If current trends continue, dairyinfo.gc.ca says that in 2015 Canada will import $870.6 Million of dairy, and we'll export $190.9 million, for a net importation of $680 Million. If Canada goes from a net $680 Million import to $18 Billion dairy export, that would be a net change of $17.32 Billion per year; which would just about double the Canadian dairy industry. Would that be enough to satisfy the SM dairy faction?

If not, what will?

Glenn Black, President
Small Flock Poultry Farmers of Canada

As consumers we are told the high cost of meat over the last year or so was because of high demand and low supply.We are told that these high meat prices might be around for some time.Why do we run around the world looking for more trade deals when we can't fill our own markets properly?
This Government was so busy slapping itself on its back over the CETA deal they forgot to tell the public one little thing,we were never filling our European Beef and Pork market quota's to start with,all that deal got us was more quota NOT to fill! why will the TPP be any different!

In the Australian model, the model seemingly finding most favour among economists, there was a retail sales tax on milk for about 8 years which made consumers pay the so-called "compensation package" to dairy farmers.

However, in Australia, nobody had to worry about cross-border shopping because Australia is an island rather-far away from any other jurisdiction - therefore a retail sales tax on milk to finance a quota buyout in Canada wouldn't solve the problem of cross-border shopping for the length of any similar buyout program in Canada.

The "hybrid" seemingly most-often touted for a Canadian buyout would appear to be a combination of:

(A) an Australian style consumer-paid buyout for no more than ten years and declining in value yearly
(B) total payments to any farmer not greater than the adjusted cost base of his/her quota as seen on his/her farm income tax return.
(C) a rather-meager one-time taxpayer-funded buyout to entice smaller farmers to leave, provided they either complete government-approved "re-training" courses or they sell their land and retire from farming.
(D) a total dollar value cap on the amount of compensation any one farm operation can receive so that big farms, the ones most likely to adjust to farming without quota, won't loot the system.

As always, my opinions may not be shared by any organization with which I am affiliated.

Stephen Thompson, Clinton ON

One of the most-frequently chanted mantras of supply management supporters is the supposed purity of Canadian dairy and poultry products in comparison to the purity of imports.

Yet, the Canadian Food Inspection Agency (CFIA) recently notified Ontario and Quebec consumers to not drink certain types of Beatrice/Parmalat chocolate milk because it contained sanitizer.

How can this be? Could it be that the CFIA, not supply management, protects consumers from tainted food products?

Stephen Thompson, Clinton ON

It could just as easily happen with beer !

I think the Canadian people can make up their own minds over the purity of home-grown or imports.The Beef and Pork industries in this country promote their products over imports also and why wouldn't they!
This should tell us that maybe the CFIA is doing a little better job than in the past where it took some serious illness outbreaks for them to issue recalls.ie Maple Leaf foods!
It is for the protection of consumers why Supply management will never endorse selling unpasteurized milk in this Country unlike our neighbours to the south.

Nonsense - the CFIA exists because Canadian people do not have the technical ability to make up their own minds about the purity of home-grown versus imported foods.

Furthermore, supply management makes comparisons all the time in an effort to defend their legislated entitlement to gouge consumers - for example, supply management supporters fall all over themselves to claim that BST isn't used in Canada, but is used in the US, even though this claim studiously ignores:

(A) the fact that the only restriction against artificial BST in Canada is that it cannot be sold in Canada.
(B) the fact that there is no reason to prohibit the importation of dairy products containing artificial BST into Canada.

In addition, supply managed farmers are blatant hypocrites for claiming to care about the "protection of consumers" when it comes to raw milk, but caring not one iota about the "protection of consumers" when it comes to price gouging at the farm gate.

Finally, the reprehensible cross-border retail price comparisons regularly done in the past by supply management in an attempt to show cross-border retail price equivalency, even in spite of the obvious fact that dairy and poultry products cross the border in only direction, are yet another example of how supply management can dish it out when it comes to making comparisons, but just can't take it.

Stephen Thompson, Clinton ON

That is not the reason the Canadian Food Inspection Agency exists, but hey, don't facts interfere....

From the CFIA website....
Who we are
At the Canadian Food Inspection Agency (CFIA), the safety of Canada's food supply is central to everything we do. That's why the CFIA works from the farm gate to the consumer's plate to protect public health. We safeguard not just the food supply, but also the plants and animals upon which safe and high-quality food depends.

In carrying out its mandate, and in support of Government of Canada priorities, the CFIA strives to:

protect Canadians from preventable health risks
protect consumers through a fair and effective food, animal and plant regulatory regime that supports competitive domestic and international markets
sustain the plant and animal resource base
contribute to the security of Canada's food supply and agricultural resource base, and
provide sound agency management.

The CFIA protects our food supply regardless of its origin and/or the marketing system used.

That's why it's so-completely disingenuous for supply management supporters to continually fear-monger about the need to keep supply management in order to assure the "quality" of the dairy and poultry products purchased by Canadian consumers.

Stephen Thompson, Clinton ON

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