Despite the uncertainty looming over the fall harvest, local dairy farmers should be receiving good news in the mail this week with the delivery of letters inviting supply-managed producers to apply for the federal compensation program meant to offset the effect on them of concessions made by Ottawa during trade negotiations.
The federal government promised in August that $1.75 billion would be made available over eight years to the nearly 11,000 dairy farmers across the country after ratification of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). As the new trade agreement between Canada, Mexico and the United States (USMCA) has yet to be ratified, it is not included in the current compensation package.
“The damage is done and this is the best we could do,” Jason Erskine, a representative of the Haut-Saint-Laurent sector of Les Producteurs du Lait du Québec, says of the compensation offered by the government. Having just returned from a meeting in Quebec City, Erskine confirms that area producers should now be receiving letters explaining the program. The amount each farm will be compensated will be determined by quota holdings as of August 31, 2019.
According to Les Producteurs du Lait du Québec, the three agreements (CETA, CPTPP, and USMCA) represent a concession of 8.4 per cent of dairy production and processing, equivalent to the annual production of around 1,200 average-sized Quebec dairy farms, or around 800 million litres of milk that will no longer be produced by Canadian farmers. It represents market losses of over $450 million or around $41,000 per farm. By 2024, when all three of the agreements are expected to be in force, nearly 20 per cent of domestic demand for dairy products will be met by imports, which represents an annual loss of $1.3 billion in sales.
“Every time someone explains the agreements to us, it seems like we have lost more of our market value,” Erskine says. “This is all new territory. We don’t know when the imports are coming or where,” he says, suggesting that the possibility of imports flooding the market, specifically in specific geographic locations, is of concern. “They could strategically really hurt us,” he says, while explaining that while consumption in Canada seems to be high enough that imports to date have not created a market surplus, there is no guarantee the situation will hold over time.
“The government has promised us ‘No more concessions’,” says Erskine, adding that he’s hopeful the incoming minority government will be held to its promises. “We know the Bloc Québécois is behind us.”