NAFTA. It appears that Mexico and the US have come to an agreement on trade terms, and now intense scrutiny is on Canada as our negotiators attempt to come to an agreement as well. Dairy is once more front and centre in the news. I’ve read comments that our industry and farmers should just be sacrificed in order to get this deal done. Just give in to Trump’s demands. We’ve heard from the experts, the government representatives, the “think tanks”. But what about those who stand to lose the most – Canada’s dairy farmers? How do they feel about the threat of their livelihood being yanked away? As a Canadian dairy farmer, my farm and family are directly in the crosshairs in this fight. That cold sick feeling in the pit of our stomachs has returned yet again as we wait to hear what the future holds for us. Will we survive this latest attack on our industry?
President Trump’s tirades against our country’s dairy supply management system and his demands to dismantle said system are frankly quite frightening. But what is most frustrating is the lack of background or real facts in his claims of unfair trade practices in dairy between the US in Canada.
Supply management means that our Canadian dairy farms produce enough milk for Canadian consumers. In order to keep this balance between demand and supply, our government has trade barriers in place in the form of tariffs on dairy imports. Foreign countries are able to export milk to Canada, but they will be charged a high tariff (up to 300 per cent). This cost is often prohibitive to imports and so Canadian processors usually rely on domestic dairy supply. But… Canada does allow some tariff-free imports – about 10 per cent. This percentage has been increasing in recent years; CETA and the new TPP have whittled away a sizeable chunk of our dairy market.
But get this: this 10 per cent is more than double the amount that the USA allows. Say what? Yes, you read that correctly. The US caps tariff free imports at about 2.75 per cent. So, the US also protects their dairy industry. Ironic, huh? Yet, President Trump has attacked our system. You see, American dairy farmers are in dire straits. They produce much much more milk than is needed in the States and export a rather significant percentage to other countries, Canada included. The global dairy market is saturated, there’s simply too much milk. This has driven the price paid to American farmers below the cost of production, pushing many farms out of business. It’s understandable then that Trump would look for ways to alleviate these problems. But expecting entirely free dairy trade with Canada to fix this problem is ludicrous. With a population 1/10th the size of the States’, our market is too small to make a very significant dent in their current surplus. Wisconsin alone produces more milk than all Canadian farms combined. The US needs to manage their own issues with over supply rather than expecting us to fix their problems. Our own farmers do a fine job of supplying our citizens with dairy products, thank you very much.
And if the border were opened, what would be the cost? Our current system ensures a fair price paid to farmers that covers the cost of production. American dairy farms are already producing milk at a loss, and Canadian farms would soon follow suit. Small farms unable to compete with the economies of scale present on mega dairies with tens of thousands of cows would be the first to go. Farms like ours. Family farms. Our rural fabric would be forever changed. Is that what Canadians want?
If you want the dairy products you enjoy to be produced on Canadian farms, under the strictest animal welfare, milk quality and food safety standards in the world, it’s time to speak up. Let your elected officials know that your Canadian dairy products and dairy farmers are important to you. Reach out to your MP. Send an email to the Prime Minister’s office. Do anything you can to encourage our government to stand firm, to not give in to Trump’s bullying tactics. If they don’t, Canadian dairy farms may one day just be a memory and we will have lost our food sovereignty and food security in the dairy market. I don’t think anyone wants to see that happen.