and Arrell Chair in the Business of Food Simon Somogyi said the CDC determines the price of milk from the supply per- spective. More transparency is needed with regards to how that price is determined, he said. The report recommends adopting a pricing formula that takes a more value-chain approach by incentivising the for- mation of cooperatives between small farms in the region, with a higher farm-gate price for dairy to recognise the input costs of production for smaller producers. The CDC should also consider ways to keep production capacity in all regions to support dairy processing, said the authors.
3. Trade barriers With this in mind, the third recommendation focuses on the removal of interprovincial trade barriers on dairy products and the creation of an innovation fund for the sector. The re- moval of interprovincial trade barriers would help promote the trade of artisanal dairy products. An innovation fund, they say, would entice dairy farmers to innovate and develop new products and markets while keeping in mind consumer values, such as sustainability, affordability and animal wel- fare. Innovation would also allow Canadian dairy producers to take advantage of export opportunities, said Somogyi. “Canada has completely missed the Asian infant formula boom,” he said, pointing to the Chinese melamine scandal as a prime opportunity. “Billions of dollars have been spent to create infant formula for the Chinese market where Chinese consumers don’t trust the locally made products. “Technology is playing against dairy farmers,” Somogyi add- ed. “Milk, in the future, might not need to come from a farm.” Lampron said investment and innovation already contribute to the improvement of the sector, though. “Unlike some oth- er sectors, the stability of supply management has actually promoted investments and innovation, as demonstrated by gains in efficiency and sustainability,” he said. “For example, since 2011, milk production has reduced its carbon footprint by 7%. “Many of those elements have progressed because of the stability provided by supply management – not in spite of it,” he added. “Changing the system now would put that progress at risk.” Somogyi, however, pointed to other potential disruptors on the horizon, emphasising, again, the need for innovation. The dairy sector in Canada, he said, should be alarmed by the rise of a generation that “thinks very differently about dairy than its predecessors.” He also pointed to precision fermentation as a possible game changer. “The research seems to suggest that in the next 10–15 years, precision fermentation – basically, a bio-digester that can make milk that is chemically identical to what a cow can make – will be available to businesses, particularly to processors,” he said.
“Technology is playing against dairy farmers,”
Somogyi added. “Milk, in the future, might not need to come from a farm.”
4. Future-proof plan for dairy sector Finally, the report recommends initiating a 20-year plan to re- duce general tariffs, incentivise innovation, develop an ex- porting plan and create a Canadian brand. Lampron said work on a future-proof plan for the dairy sector is already in the works. “The dairy sector has evolved over time with a view to the future,” he said, pointing to current cross-sector collaboration. DFC began working closely with provincial dairy farm organi- sations, Dairy Processors Association of Canada and the fed- eral government in 2019. Their aim, he said, is to ensure the
▶DAIRY GLOBAL | Volume 7, No. 5, 2020
“There is an im- plication in the report to reduce the level of do- mestic produc- tion, with a buy- back programme,” said Pierre Lampron, presi- dent of Dairy Farmers of Canada.
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PHOTO: TEAM PUBLICATIE
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