Canada’s dairy industry says it shouldn’t bear any additional hardship in NAFTA renegotiations after having been forced to give up so much in past trade deals.
If the United States wants increased access to Canada, it should rejoin the Trans-Pacific Partnership that granted a 3.25 per cent quota that was expected to be filled mainly by the U.S., said Dairy Farmers of Ontario CEO Graham Lloyd.
“The TPP is the vehicle that they should be going to,” he said in an interview Wednesday. “They shouldn’t be looking for NAFTA to gain access to the dairy market.”
Lloyd said giving the Americans any more access to Canada won’t make a dent in the massive daily overproduction in three large milk producing states, but would cause serious harm to the Canadian dairy farmer.
He is among dairy industry advocates who say Canada should have recalibrated the amount of foreign access permitted under TPP when American President Donald Trump withdrew from the trade deal. Maintaining the 3.25 per cent quota means that dairy from Australia and New Zealand will displace American product.
Dairy farmers say they’re concerned about NAFTA renegotiations given how much of the Canadian market has already been given away under the World Trade Organization, the Comprehensive Economic and Trade Agreement and TPP.
More than 15 per cent the Canadian dairy market will be opened to imports with the implementation of TPP. That includes 10 per cent from trade deals in the 1990s and two per cent as part of the Canada-Europe trade deal.
New Brunswick farmer Michael Bouma said he’s hoping the federal government will honour its commitment to defend supply management despite intense pressure from U.S. negotiators.
Dismantling of the current system would be devastating for rural communities and farmers in Quebec, Ontario and Atlantic Canada, forcing many small farms to close, he said.
“The amount of farmers left would be less than a tenth of what we have presently,” Bouma said from the Bathurst area of New Brunswick, where he milks about 120 cows.
“It’s only the more efficient farms that might be able to hold on. Certainly the smaller mom and pop farms that may be milking 30, 40 cows would definitely be having a very hard time.”
Ontario dairy farmer Ralph Dietrich, who milks about 180 cows north of the city of Guelph, said farmers are disappointed with the TPP outcome.
However, he said it gives the industry a sense of urgency to fight so that NAFTA doesn’t cause a further erosion.
Dietrich said the threat is coming as the sector has been enjoying growth and millions of dollars have been spent modernizing facilities.
“It could prove as a pivot point to re-energize us as an industry — to be even more diligent with respect to ensuring that we’ve already given at the office and we don’t need to do it again through NAFTA.”
The Dairy Farmers of Canada said Ottawa must recognize the cumulative impact of the trade deals.
Francois Dumontier of the Quebec Dairy Producers said while Canada has increased foreign imports, the Americans restrict access to its market to less than three per cent of internal consumption.
Meanwhile, exports from the U.S. to Canada have surged to 178,000 tonnes in 2016 from 24,000 tonnes in 1993, he said.
“If they want to have this market access they have to rejoin the TPP but we will not be giving twice to the Americans.”
Federal Agriculture Minister Lawrence MacAulay insisted the government fully supports the supply-managed sector and that it intends to consult with industry stakeholders about potential compensation.
The supply management system was created in the early 1970s in response to wide swings in prices and interprovincial trade disputes as technology and other developments disrupted the agricultural markets.
The system sets prices and protects Canadian farmers from competition, creating stability for dairy, egg, chicken and turkey producers.
It also blocks out foreign production from the Canadian market through the imposition of tariffs, a mechanism that has resulted in long-running disputes with Canada’s trading partners.