OCTOBER 2018 • COUNTRY LIFE IN BC


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US could learn a thing (or two) from Canada Supply management model would go a long way to help American dairy farmers


Mexico and the US have come to an agreement on trade terms in the ongoing


Viewpoint by JULAINE TREUR


“renegotiation of NAFTA” saga, and now intense scrutiny is on Canada as our negotiators attempt to come to an agreement, too. Dairy is once more front and centre in the news. I’ve read and heard comments from the media, the analysts and certain politicians that our industry and farmers should be sacrificed in order to get a deal done. Just give in to Trump’s demands. 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 livelihood? 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 and 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. Other countries are able to export milk to Canada, but pay high tariffs (up to 300%). This cost is often prohibitive to importers, and so Canadian processors usually rely on


domestic dairy supply. This is not a new phenomenon; tariffs have been in place for decades. However, Canada does allow some tariff-free imports – more than 10% of our dairy market is accessible, free of duties. This percentage has been increasing in recent years. The Canada-EU Comprehensive Economic and Trade Agreement (CETA) and the new Trans-Pacific Partnership (CP-TPP) have both whittled away a sizeable chunk of our dairy market. But here’s an interesting


fact: this 10% is more than triple the amount the US allows. Yes, you read that correctly. The US caps tariff-free


imports at about 2.75% of its domestic market. So, the US also protects its 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 the US needs 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, or expecting us to allow more access to our market to fix this problem, is ludicrous. With a population a tenth


the size of the States, our market is too small to make a significant dent in their surplus. Wisconsin alone produces more milk than all farms in Canada combined. Additionally, if Trump wanted more access to our dairy market, he should not have pulled the US out of the TPP, as increased dairy access was part of that agreement. Many analysts and trade


experts predict the new NAFTA will, in the end, allow even more tariff-free dairy imports into Canada. This is unacceptable to our Canadian dairy farmers. With every trade deal that comes along, we have been expected to give up a portion of our market. The foreign milk that will flow in would displace milk that’s now produced on our own family farms. And for what? It won’t help


anyone. It won’t help American farmers because their oversupply is so huge that a percentage (or even ALL) of our market is literally just a


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drop in the bucket compared to the massive glut of milk looking for a home. It definitely won’t help our


Canadian farmers, as we’ll be forced to produce less milk by selling part of our herds and downsizing our operations while maintaining our current debt loads and bank payments. There’s no win here; it’s just lose, lose, lose – on both sides of the border. The US needs to manage


its own issues with oversupply rather than expect us to fix their problems. Our own farmers do a fine job of supplying Canada with dairy products, thank you very


much. Perhaps Trump could better spend his time and bluster helping his farmers to figure out a way to manage their oversupply on the farm level.


Here’s a novel thought:


maybe the US should look at a form of supply management to ease their dairy woes and give their farmers the support and stability they so desperately need. There’s even a good model for them to follow. They just need to look north! Julaine Treur operates Creekside Dairy, an organic dairy farm, with her husband Johannes in Agassiz.


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