It’s been called a handout, a subsidy and even a bailout.
Proposed compensation for supply-managed commodities as Canada signed on to the Trans-Pacific Partnership has garnered much negative publicity, prompting some Manitoba dairy producers to put forward a bold proposal for farmers to reject cash payments.
Instead, they want to see the money — should the new Liberal government adhere to the previous Conservative government’s promise of $4.3 billion in compensation for supply-managed industries — to be invested into growing the Canadian dairy market.
“It’s a bad consumer image for farmers to be cashing government cheques in a supply managed system,” said Steve Boerchers, who introduced the controversial resolution at Dairy Farmers of Manitoba’s annual general meeting in Winnipeg last week.
“Seeing how we have enough problems otherwise that need to be dealt with in the industry, skim milk powder, overproduction and the diafiltered milk coming in from the United States, perhaps that money could be used in a more productive manner.”
While the resolution was defeated, it still garnered support from roughly two-thirds of voting members.
David Wiens, Dairy Farmers of Manitoba chairman, agreed that developing the market for dairy products was important, but also noted that $100 million is already spent on market development in Canada each year. He then added that refusing compensation wouldn’t quiet critics.
“I know we do have our critics out there, but they would be our critics whether or not we accept this compensation,” said Wiens. “They do not favour supply management, they are simply philosophically opposed to our system, and we certainly wouldn’t get their approval at any rate.”
Dairy Farmers of Canada president, Wally Smith, shared that assessment, describing the market loss as an expropriation.
“This agreement gives access to all dairy products… that’s 3.25 per cent of your expected production for 2016, that’s $246 million,” said Smith. “Now pile this ‘gift’ to other countries on top of what was already given in CETA, and it’s a pretty significant hit on our asset base.”
He added that compensation was a part of their own discussions with the federal government early on in the TPP negotiations — negotiations where other participant countries had originally called for a total dismantling of Canada’s supply-managed system.
“We said we can’t take another hit, and if you’re going to expropriate our property — because it’s an asset — if you’re going to expropriate more property from dairy farmers in Canada, right across the country, you’re going to pay a price for it,” Smith told producers.
Individual farmers may also need the compensation to adapt their own operations, said Wiens.
“I do want to also ensure that producers are going to have the opportunity to position themselves well, to make improvements on the farm, or simply to position themselves to adapt to those new market realities that would be coming when these trade agreements are ratified,” he said.
“Certainly there are benefits to reinvesting some of this money, but we also have to bear in mind producers on every farm in the country will be taking an economic hit.”