Friday, April 21, 2017

Trump targets Fat Canadian Dairy Farmers

U.S. President Donald Trump unloaded on Canada from the Oval Office, suggesting that the country was “taking advantage” of U.S. workers and demanding trade renegotiations begin “very quickly.”

Trump denounced the North American Free Trade Agreement as a “disaster” and said he wants Canada to move on three industries in particular: dairy farming, lumber and energy.

Lawrence MacAulay
The Canadian government said it would compensate the country’s dairy farmers for increased European imports allowed under a pending free trade deal.

The government will meet with the dairy industry within the next 30 days to discuss compensation, said Agriculture Minister Lawrence MacAulay and International Trade Minister Chrystia Freeland. Under Canada’s free trade deal with the European Union, which the affected countries have not yet ratified, European dairies would receive tariff-free access for an additional 17,700 tonnes of cheese, representing about 2 per cent of Canadian cheese consumption according to Dairy Farmers of Canada.

Chrystia Freeland
Wally Smith, President of Dairy Farmers of Canada (DFC), joined a press conference organized by Les Producteurs de lait du Québec (PLQ) to express their dissatisfaction with the Canadian government.

"I am here today to show that all of Canada's dairy farmers speak with one voice on diafiltered milk. We are collectively disappointed with the lack of action on enforcement of the cheese standards."
Under the cheese compositional standards for Canada, it is required that a minimum percentage of the protein used in cheese making be sourced from milk. Milk protein substances (including diafiltered milk) are ingredients that are less costly.

Every ounce of milk in Canada is governed by a complex tangle of rules and regulations because of a cumbersome and expensive system called supply management, which protects existing farmers. Fluid milk consumption has been on a steady decline in Canada: from 91 litres per capita in 1994 to 76 litres in 2013. Paradoxically Canadian milk prices have risen substantially and are among the highest in the world.
Canadian Dairy farmers meanwhile enjoy a large and steady increase in their incomes. When Canada opened a tiny 3.25 per cent of Canada's dairy market to far cheaper foreign products, the Dairy Farmers proudly trumpeted "No negative impact and supply management preserved for the next generation." The Stephen Harper government soon announced a $4.3 billion compensation scheme to soothe the dairy industry. There are less than 12 thousand dairy farms in Canada, and their total net farm annual receipts only reach $6.07 billion.
Canada's dairy industry is politically influential. Even with the number of dairy farms dropping by 91 per cent in Canada since 1971, they have managed to retain massive influence over politicians to protect and enhance their monopoly.

The lobbyist registry shows that dairy lobbyists have had more meetings and communications with federal representatives than any other industry. Most recent figures show the national dairy lobby have had almost three times as much communication with designated public office holders than Enbridge, TransCanada and the Canadian Energy Pipeline Association combined. It is estimated that the collective national dairy lobby spends $100 million a year on lobbying.
The Government of Canada says that income guarantee payments are "calculated based on expected domestic production levels." This means supply, not market demand dictates payments. This is key, since the industry chronically over-produces and then dumps excess product. The Dairy Farmers of Ontario alone produced 5.4-million litres of excess skim milk in one month and this spring they dumped roughly 800,000 litres of milk into manure lagoons due to low demand.