Manitoba dairy farmers attending annual meetings this month are trying to understand the coming changes as a result of the new United States-Mexico-Canada Agreement (USMCA).
There are some serious questions being asked about what the new deal means for the family farm and their future, said David Wiens, a Manitoba dairy farmer and vice-president of Dairy Farmers of Canada, speaking at a Winkler producers’ fall meeting last week.
“There’s a lot of shock. People can hardly believe that this was given up by a government that so-called supports and defends supply management,” he said.
Why it matters: Concessions granted under the USMCA and earlier trade deals are creating uncertainty that undermines the industry’s ability to plan for the future.
The additional market access gained by the deal for American dairy product is about equal to the entire production off all farms in this province, Wiens told the meeting.
Dairy Farmers of Canada analysis of the deal shows the access — pegged at 3.59 per cent of the Canadian market — is actually closer to four per cent, he said. And Manitoba dairy farms together produce about four per cent of this country’s milk supply.
“Four per cent would basically wipe out all of Manitoba’s production,” said Wiens.
Combined with CETA and CPTPP it means that Canada has given away about 18 per cent of the Canadian dairy market, he said.
“That represents a loss to dairy farmers of $1.3 billion a year,” Wiens said noting that’s strictly lost revenue on the farm and doesn’t include processing and ancillary businesses related to the dairy sector.
Canada has also now agreed to eliminate Class 7, which priced milk ingredients such as protein concentrates, skim milk and whole milk powder, as well as to place restrictions on exporting dairy ingredients. Canada is also required to notify the U.S. if it makes any further changes to its milk class pricing program.
“It’s a deal, the way we see it, where Canada has given up food sovereignty, certainly when it comes to dairy,” Wiens said.
There are still a lot of unanswered questions about the deal itself, and how it was reached. Without answers, farmers are shaking their heads in disbelief at this, he said.
“We’re not even sure how to move forward at this point.”
Industry on hold
Farmers are now asking ‘what’s next?’ Nothing less than their futures and livelihoods are now at stake.
“What we’re hearing is any plans we had for next year in investments we wanted to make on the farm… that’s on hold,” Wiens said.
“They have given away a lot more than just a number on a page here, and yet there doesn’t seem to be a very solid understanding of that.”
Contractors have contacted him asking ‘how do we plan?’ and processors that have been steadily increasing processing capacity in this province have now signalled they need clarification of the full impact of the new agreement before they more forward with new initiatives.
“This has basically brought things to a halt in dairy,” Wiens said.
But most disheartening of all, is the knowledge that farm families feel such a pall has been cast that they’re quietly starting to tell a generation they were grooming to take over that there may be no future for them in the family business.
“That to me is the most heart wrenching of all, where there’s some producers who are losing hope, ” he said.
Compensation isn’t a strategy
Meanwhile, the federal government is only talking about ‘compensation.’ The details are unknown and compensation, which refers to something that’s happened ‘in the past’ does nothing to allay uncertainty or clarify the government’s vision for this industry going forward, he said.
“To simply say they’ll ensure there is compensation, that does not address moving forward,” he said. “Far more important is ‘what is the future?’ That is the question that we’re waiting to have answers for,” he said.
“We have to hold the government to account for what it agreed to and to have a clear vision for how it sees the industry moving forward.”
Wiens said Ralph Eichler, provincial minister of agriculture, has signalled he wants to meet with him and discuss the impact of this on Manitoba dairy farmers.
Dairy is one of the top two agricultural sectors in every province except in the Prairie provinces, but is nonetheless a sector all about value-adding to agricultural product. That means jobs and economic impact that extends well beyond the farm.