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Innovation, Trade Dominate Dairy Meeting

One surefire way to make dairy farmers squirm is suggest they consider exporting dairy products again. Sure they’re happy to sell breeding and cull cows outside the country but they don’t want to go anywhere near the international market for dairy products.

Gilles Gauthier, Canada’s chief agriculture negotiator at the WTO, suggests that even with all its subsidies and price volatility, the international market may yet offer some niche opportunities for Canada’s high-quality dairy products.

Gauthier’s comment wasn’t meant as any weakening in Canada’s demand that the WTO recognize the country’s supply management system. “Canada’s position remains the same as all along,” he told the Dairy Farmers of Canada annual policy conference. Canada will protect its dairy and poultry industries. “We must convince our partners of the need for a solution that suits Canada.”

After outlining the differences between the 150 countries involved in the Doha negotiations and noting that a lot of progress has been reached on agriculture and other issues in Geneva, he said a final agreement on a new international trade deal “will require a comprehensive alignment of stars to occur in 2010.”

Gauthier, who grew up on a Quebec dairy farm, offered his comment on international markets in response to a question about preventing any further loss of the domestic dairy market to import and milk substitutes. “Maybe it’s time to think about whether there are opportunities in foreign markets. If we face constant pressure to open our domestic market, maybe we can find a way to take advantage of other markets. It could be to the benefit of the dairy sector to explore what opportunities there might be there.”

There was no squirming when Agriculture Minister Gerry Ritz delivered on two promises. Ottawa will provide more than $8.7 million and “partner with industry and universities to create a cluster of scientific and technical expertise to study the health benefits of dairy products and ways to improve animal productivity through health and breeding.” Other players in the Agri-Science Clusters initiative are the Canadian Dairy Commission and the Natural Sciences and Engineering Research Council of Canada. DFC will kick in $3 million.

Ottawa will also contribute up to $995,000 in DFC’s Canadian Quality Milk food safety system, Ritz added. The program helps farmers strengthen their on-farm food systems. The funding will go toward development of a national database, called a National Electronic Administ rat ion System, to track on-farm audits and manage the validation and registration processes for this system.

The cluster announcement won Ritz hearty applause from the delegates. DFC president Jacques Laforge said the dairy industry needs to work “on research and innovation to ensure our Canadian dairy products remain a viable source of pride for Canadians over the long term.”

However, Ritz didn’t deliver on a request from cattle groups and packers for a subsidy on processing cows over 30 months of age.

Ritz said in the aftermath of the BSE outbreak, Ottawa injected $130 million into the packing sector and took a lot of criticism for it. “We haven’t seen a lot of innovation arising from that.”

Industry asked for a federal support payment of $31.70 a head to offset the high cost of Canada’s SRM rules. Ritz said his department is looking for ways to reduce the cost and will pursue discussions with the Canadian Meat Council and other groups that support the subsidy request.

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