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Dairy and poultry farm groups discuss USMCA compensation

It could take more than money to settle the ruffled feathers of supply management groups, who say they were pawns in the negotiations

Within hours of announcing a new free trade deal with the United States and Mexico, Prime Minister Justin Trudeau and Foreign Affairs Minister Chrystia Freeland were promising compensation for dairy and poultry farmers.

While Trudeau and Freeland talked as if the compensation discussions had already started, Agriculture Minister Lawrence MacAulay has just begun to arrange meetings with the groups. They’re still digesting how much financial pain the United States-Mexico-Canada Agreement (USMCA) could have on them in the coming years, spokespersons said.

Arranged on short notice, Trudeau met Quebec dairy industry leaders in Montreal on Sept. 3. After the hour-long session Dairy Farmers of Canada Pierre Lampron said Trudeau offered no details on measures to mitigate the impact of the new agreement. The executive of Chicken Farmers of Canada met in British Columbia to discuss the sector’s future.

One industry insider said, “We feel like we were bargaining chips and their idea of throwing money at farmers to compensate shows they clearly do not understand the passion of farmers for their choice of how they make a living. Yes, farmers braced for the worst and hoped for the best. They still have that sinking feeling of being used this week, while the U.S. gloats.”

Answering opposition questions in the Commons, Trudeau said, “We worked with dairy industry stakeholders to make sure that they will be compensated for the market share we had to cede to the Americans.”

He added, “By not giving into American demands to scrap supply management, the government protected it.”

Although the USMCA along with the European and proposed Pacific trade deals have opened the Canadian market to a lot more foreign dairy and poultry, Trudeau said, “Naturally, we will work with the dairy industry and dairy producers to ensure that there is compensation for the market share given to the U.S. However, we know that we have preserved supply management for future generations.”

Examining details

The dairy and poultry groups are still examining the details of the agreement to determine its full effect. “The outcome of the negotiations will have a negative impact on the system of supply management as a whole,” said Roger Pelissero, chair of Egg Farmers of Canada.

“These latest concessions along with the concessions made earlier this year at the conclusion of the CPTPP will result in a loss of farm family income, and will affect the health and continued viability of rural communities across Canada,” he said.

USMCA follows two previous trade agreements in which increased access to the Canadian dairy market was granted, CETA and the CPTPP, which sacrificed the equivalent of a quarter of a billion dollars annually in dairy production to industries in other countries, said DFC president Lampron.

“The Canadian government has said loud and clear that it wants a prosperous dairy sector,” he said. “It will be interesting to see how it can reconcile the concessions made in the negotiation of this agreement with its goal of prosperity.”

Chicken Farmers of Canada chair Benoit Fontaine said his members “are relieved that over a year of uncertainty over the future of the agricultural landscape in Canada is over.”

However, more than 10.7 per cent of Canadian chicken production are affected by the three trade agreements.

“With this in mind, it will be more important now than ever for the government to ensure that it maintains its commitment to ending existing practices that currently cost the Canadian chicken industry thousands of jobs, millions of kilograms in production, millions of dollars in revenues and millions of dollars in GDP contributions to the Canadian economy,” Fontaine said.

“We will be looking to the government for an action plan to support our farmers in light of trade deals that are eroding the sustainability of our local food sector. We will be pushing for timely commitments to mitigation and remedies,” said Turkey Farmers of Canada chair Darren Ference.

Jack Greydanus, chair of the Canadian Hatching Egg Producers, said that while the USMCA has maintained the same level for broiler hatching egg and chick tariff-rate quotas as under NAFTA, “this represents a significant level of imports that must be taken into account by Canadian hatching egg farmers.”

Processors concerned

Mathieu Frigon, president and chief executive officer of the Dairy Processors Association of Canada (DPAC), said the USMCA “demonstrates very little support for our interests.”

Increased access for dairy products “will decrease domestic production and greatly affect the dairy-processing industry’s ability to see returns on investments. Combined, it is estimated that losses stemming just from the agreements’ market access will stand at more than $2 billion over the course of implementation,” he said.

Robin Horel, president and CEO of the Canadian Poultry and Egg Processors Council, said his organization would decline comment until after reviewing details of the deal.

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