DECEMBER 2017 • COUNTRY LIFE IN BC Trade negotiations creating uncertainty


Foreigners view Canada’s supply-managed dairy industry as the “golden goose” There’s no question that


pressure is mounting on the Canadian government to grant increased market access to US dairy interests


imports. As a “golden goose”


Viewpoint by Trevor Hargreaves


amidst NAFTA negotiations. With ongoing overproduction hurting prices in US dairy markets, this would be a sizeable domestic win for both the US industry and an aggressive Trump administration. President Trump promised Canadian market access to US dairy farmers during his somewhat factually challenged announcement from a Wisconsin podium back in April, and this will be a major sticking point in NAFTA’s renewal negotiations. Trade pressures have been a common theme for the Canadian dairy industry in recent years. The pressure was mounting during the Comprehensive European Trade Agreement (CETA) negotiations two years ago, and tensions were equally high during the failed Trans- Pacific Partnership (TPP) talks last year. As the industry now eyes potential NAFTA market concessions, the Canadian dairy sector is in the midst of adapting to the roll-out of sizeable new foreign-cheese market access granted as a last-minute trade concession by the Harper government to get CETA signed.


Government support


As I see it, the challenge for supply management and the dairy industry moving forward isn’t that it doesn’t have government support. It does. Supply management is strongly supported at both the provincial and federal level. In a brief conversation on the subject about five months ago with Prime Minister Trudeau, he said to me directly, “I’m a big supporter of supply management and intend to strongly defend it.” The real challenge for supply-managed sectors – and particularly Canadian dairy – is that they represent a golden goose to foreign agricultural markets. The great fallacy of global trade agreements is the notion that these deals are bringing new products to new markets. In reality, far more often than not, these deals mean a segment of a given domestic market is disrupted by new, competitively priced foreign


industry, dairy is a lucrative win whenever market concessions are granted, as Canadian dairy is unfairly perceived as a “closed market.” This is


nonsensical


based on the fact that Canada imports five times more US dairy than we export to the US. Yet this market perspective artificially escalates the importance of dairy amidst any ongoing trade discussions regardless of the specific agreement, be it CETA, TPP, NAFTA or what- have-you. There’s no debating the


fact that foreign dairy markets in the US, New Zealand and Europe are outwardly struggling amidst low milk prices, over- production, declining market trends, declining subsidization rates and


crowded export opportunities. To them, Canada is the great hope at turning around a failing bottom line. If they’re explorers, we’re their Eldorado. That prosperity they’re


after, however, is ours. Dairy is a local community


industry. The employment and profits flow directly back into agricultural regions and our collective GDP and tax contributions are both sizeable and stable. Domestic dairy prosperity is ours as Canadians, and it’s precisely what we stand to lose every time the Canadian dairy market is eroded with new market concessions.


Cheese sliced


Let’s look at this historically, just setting our view back a few years. A sizeable piece of the Canadian cheese market was granted two years ago under CETA (16,700 tonnes). Additional dairy market access was on the table for


TPP (3.25%), and while the original deal failed, it’s now being resurrected as TPP11 (minus US participation). In addition, the industry faces the risk of additional market concessions under NAFTA in coming weeks and months. Now, I want you to put


yourself in the shoes of a BC dairy farmer. Canadian governments may support supply-managed sectors in theory, but if you combine the ongoing string of trade concessions, the market is rapidly being eroded for the benefit of other sectors. While trade agreements (at least in theory) support our domestic economy, they’re an outward negative for Canadian dairy. In this province, dairy quota and land have the highest values in Canada, raising the cost of production. How can we as a province and, indeed, a nation, expect the next generation of dairy farmers to confidently assume ever- escalating financial


obligations (and succession plan agreements from their


From everyone at Country Life in BC, may the spirit of the holiday season be yours now & in the new year!


parents), when piece after piece of the industry is being handed to foreign interests? In the US, dairy production


is heavily subsidized by the US Farm Bill. In Canada, however, it’s not. It’s not an “apples to apples” comparison, and when a piece of the Canadian dairy market is given away, what’s really being handed off is the investment of generations of Canadian farmers. Amidst a global dairy


industry downturn, only one Western dairy-market is really prospering: Canada’s. Foreign Affairs minister


Chrystia Freeland once said that Canada must “set our own clear and sovereign course” amidst NAFTA negotiations. A big part of that course, as I see it, is more rigidly defending Canadian dairy, not only in NAFTA today but the trade deals of tomorrow. Trevor Hargreaves is director of producer relations and communications at the BC Dairy Association.


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columnists Bob Collins Margaret Evans Judie Steeves Linda Wegner


contributors Emily Bulmer Cam Fortems Terry Fries


Gina Haambuckers Franya Jedwab Barbara Johnstone Grimmer


Naomi McGeachy Sean McIntyre Susan McIver


Ronda Payne Joe Sleigh Jennifer Smith


Myrna Stark Leader Tom Walker Chris Yates


graphics Tina Rezansoff


CATHY GLOVER publisher & editor


DAVID SCHMIDT editor emeritus


PETER MITHAM associate editor


TAMARA LEIGH contributing editor


PHOTO BY NAOMI MCGEACHY | SWEET IRON PHOTOGRAPHY


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