by JIM ALGIE and SUSAN MANN
The Canada Europe Trade Agreement (CETA) almost inevitably will influence planned revisions this year to milk quota policy, newly-elected Dairy Farmers of Ontario vice-chairman Ralph Dietrich said Friday.
Exactly how the agreement will change things is hard to say. But trade issues loom large among farmers working within Canada’s supply-managed farm commodity systems.
Elected to the Dairy Farmers vice-chairmanship, Thursday, Dietrich told a farm meeting in central Bruce County, Friday, he and other Dairy Farmers board members were “shocked” and “surprised” by details of federal government announcements in October over potential increases of European dairy imports.
The Ontario board has joined active national lobbying to seek an administrative role for farmers in the import allocation process and to lengthen the period for implementation of the new deal to as much as 10 years. The agreement has yet to be ratified by European Union member countries or by Canadian provinces; but Dietrich figures the provinces are on side already because of gains in other parts of the economy.
It’s a clear hit for dairy, however, particularly for fine cheese production based mainly in Ontario and Quebec. From existing import quota at 20,000 tonnes, CETA raises the limit to 37,700 tonnes. That represents about 63 per cent of the fine cheese market, Dietrich told farmers during Dairy Day sessions at Grey-Bruce Farmers Week in Elmwood.
“There are huge, huge implications,” Dietrich said. He estimated lost quota based on new imports could amount to a cut of about 2.25 per cent.
It’s one reason Dairy Farmers board members voted initially against a proposed milk price increase to take effect Feb. 1. They later agreed with the move based on production cost calculations and the votes of other provinces.
“I believe it’s a mixed blessing,” Dietrich said of the pending price increase. “There’s a price point where you lose your consumer,” he said.
“We have to be careful we’re not getting to that price despite the fact out production costs are going up,” Dietrich said.
Dairy supply management in Canada faces a further challenge from current talks on the Trans-Pacific Partnership. Negotiators have announced general agreement in most areas of trade except agriculture, Dietrich said.
He fears the CETA example may suggest to dairy exporters such as the United States, Australia and New Zealand that “Canada is backing down on supply management.”
Dietrich operates a 90-cow milking operation near Mildmay and represents DFO members in Bruce and Grey counties. Two former board representatives for the area, Bruce Saunders and the late Ken McKinnon, also held executive board offices with the provincial milk board.
Quota policies introduced four years ago to limit prices and to simplify the participation of newcomers joining the province’s milk supply are due for review this year. Speaking with farmers, Dietrich emphasized the need for them to consult their county milk committee members about adjustments they hope to see.
Interviewed later, Dietrich said recent trade developments will likely add pressure to the quota review process.
“Supply management in my opinion has to change; nothing remains the same,” Dietrich told reporters in Elmwood.
“We have to be cognizant of government. Government is who we rely on for supply management security,” Dietrich said. However, he also said further adjustments in quota policy will depend on milk producers.
“When we are involved in our quota policy we have to take into consideration the government interpretation of what we do . . . But it’s an industry decision,” Dietrich said.
“The producers need to make the decisions, not the board and I can tell you this, it’s not going to be unanimous.”
photo: Bill Emmott
On Thursday at the provincial commodity organization’s annual meeting in Toronto, chair Bill Emmott told delegates it isn’t clear how much use Canada will be able to make of the new duty free access for Canadian beef in CETA.
Canada has been given new access for 64,950 tonnes of beef in the agreement but the Europeans have requirements for beef free of the growth additive, ractopamine, along with other restrictions.
Emmott told delegates 30 per cent of all beef in Canada comes from dairy animals and that number is even higher in Ontario.
Canadian farmers use genetically modified crops to feed their animals and there are also restrictions on GM crops in Europe, he noted. Those restrictions may put limits on the actual amount of beef farmers can export.
General manager Peter Gould said in his report the announcement by the Canadian government this past fall that the agreement contained a provision doubling the amount of tariff-free cheese the European Union could export to Canada was “unexpected and a clear signal that the dairy sector needs to improve its working relationship with the federal government and redouble efforts to ensure that supply management is not traded away in future negotiations.” BF
Comments
Circle the wagons all you dairy farmers and employees here comes free trade into Canada and you are not ready!! THE SAME OLD SAME OLD lobby Government ,they will save us ,do you people know how stupid you look !! Seems not ,I can remember this same approach taken when N.A.F.T.A WAS BEING FINILIZED AND THE LEADERS SENT IN !! Instead of working with the Government on time and access and preparing for direct competition in the market ,they play the blame game !! How sick ,it is about time Governments wake up !! This is and was a government policy and program for the Country that has out lived it's time !! MOVE ON !!THE DAIRY INDUSTRY NEEDS TO GET READY TO FACE HUGE AMOUNTS OF IMPORTS COMING IN TARIFF FREE IN 2014!! Regards ,Bill Denby c/o THE NEGOTIATORS AND ASSOCIATES
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A new vice-chair rallying the troops and good for him but surely he has seen some of this before.Maybe he wasn't around for the 40,000 dairy farmers and supporters march on Parliament hill back in the 90's, that was a time of uncertainness in the Industry and l remember a number of local dairy producers exiting the business at that time but that was 20 years ago.
Mr.Dietrich should also know that nothing in the Dairy Industry will ever be unanimous,if at some Quota meeting you have 20 producers speaking up and giving their input you will probably have 20 different ideas, that is the nature of the business.
That 2.25 in lost Quota could easily be made up with the plugged hole in Pizza kits coming up from the states but again the CETA deal has to be ratified by all and the EU have troubles ratifying some issues amongst themselves, its probably a good indication of why it might take up to two years to get everything in place.
A lot can happen in 2 years, such as the US/EU trade deal coming up.
You guys have lived in a a glass house for many years when the rest of us were left to fend for ourselves.I wish I had a cost of production formula to work with over the last ten years when crop prices were bad. The quotas going boys get ready
It is my understanding that we can sell dairy products to the Europeans, shouldn't this trade deal be good news? How many times have I heard that our dairy farmers are the best in the world, and I am confident that many are, so lets see it. Raube Beuerman
The one thing every one is missing is the fact that there is almost no competition for milk , BUT there is all kinds of competition for meat and protien .
As meat consumption per person goes down and will continue to , the price and market for it will only get smaller and the price lower . Hence more gov bail outs for these guys . I am surprised that pork has not sued the turkey industry over turkey bacon . Too many times your sector is too narrow minded .
Is SM perfect , No Way . Neither is the pork industry ie: their back room deal that crippled many young & beginning fellow pork farmers so they could get more them selves . Incase you missed it there was a very good letter in the Ont Farmer not long ago . I don't think the pork industry needs to tell some other they are living in a glass house with rose coloured glasses . If the market place is not willing to pay the price for milk , the consumption will drop which will drop the price . Same with every thing . Sound familiar to an over producing pork industry ??
"As meat consumption per person goes down and will continue to , the price and market for it will only get smaller and the price lower".
Where on earth have you been hiding?
Meat consumption is predicted to rise not fall as developing countries increase their level of income and demand better diets...read more meat.
This is already happening around the world. Maybe it involves the people that are being hired by Hinz or Kellogs, but that is the exact opposite to what you claim. The price for pork and beef is expected to reach all time highs in 2014.
But I do agree with your one statement..." Is SM perfect , No Way".
Supply management has outlived its purpose and that was the small family farms survival. Canada only needs half as many dairy farms to fill its own market, let the larger ones buy out the smaller ones and you can drop the price to the consumer and maybe,...maybe... export product. The larger guys would trample over anyone to be able to expand.
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