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Donald Trump has it wrong on the Canadian dairy system

The president is in reality championing a globalized system that will disadvantage U.S. dairy farmers

row of cows being milked

Anthony Pahnke is vice-president of the Family Farm Defenders and an assistant professor of international relations at San Francisco State University. This piece appeared in a recent issue of Wisconsin State Farmer. 

President Donald Trump is wrong on dairy because he supports free trade. At first, this may appear incorrect, especially with the trade disputes over tariffs with China and the European Union. Despite such views, his position on agriculture — dairy in particular — is entirely different, taking a page right out of the free-trading Democrat’s economic playbook of the 1990s.

Consider Trump’s tweet from early June that targeted Canada’s dairy industry. According to Trump, Canada places a 270 per cent tariff on dairy imports, which is “unfair to our farmers!” What Trump is actually targeting is Canada’s supply management system, a series of policies that stabilize the prices that farmers receive through setting production quotas and limiting supply.

Comparing milk prices in the two countries shows a steady rise over the years for Canadian farmers, while in the United States, we find a veritable roller-coaster of sharp increases and decreases that vary every three years or so.

As the current U.S. dairy crisis is now unfolding, characterized by low milk prices, a wave of bankruptcies, and in some cases, farmer suicides, some have expressed interest in learning about the not-so-free market system in Canada. In fact, the Wisconsin Farmers Union hosted Canadian farmers earlier this year who came to the state to discuss supply management.

Yet, instead of praising a system that benefits rural communities, and that U.S. dairy farmers have expressed interest in understanding, Trump bashes it. Also, earlier this year Trump proposed that the U.S. could possibly re-enter the intercontinental free trade agreement, the Trans-Pacific Partnership (TPP), which he withdrew the U.S. from early in his presidency. The reason for this change is to help the U.S. exports find markets in foreign countries. In criticizing the Canadian system and potentially rejoining the TPP, Trump is voicing support for economic globalization and free markets.

  • Read more: Could Trump save the Canadian dairy industry from itself?

Where else have we seen such a support for free trade in agriculture? Well, the answer is in the Clinton administration. After becoming president in 1992, one of Bill Clinton’s first moves was to sign into law the North American Free Trade Agreement (NAFTA). NAFTA seeks to create a complete free trade zone between Canada, Mexico, and the United States. While certain areas in agriculture are exempt — for instance, Canadian dairy — the overall thrust is not to keep people farming, but to promote exports for the advantage of agribusiness conglomerates.

Similarly, in 1994, the U.S. Senate ratified and Bill Clinton signed the treaty that created the World Trade Organization (WTO). In the WTO, the goal is the same as NAFTA, but with the difference that free trade is global and not merely regional.

What rural communities in Wisconsin and throughout the United States have painfully learned, especially since the 1990s, is that free trade and growing export markets do not keep people in the countryside. Since 1992, according to the USDA, the number of licensed dairy herds nationally have fallen from over 131,000 to 40,000.

That 60 per cent decline has not resulted in diminished supply — consumers have retained regular access to milk and other dairy products as farms have increased their production and size. The average number of cows per operation has doubled during this time, going from approximately 50 in the early 1990s to over 100 currently. Factory farms of thousands of cows are increasingly dotting the Wisconsin landscape alongside small farmers auctioning their land, equipment, and animals because they cannot pay their bills.

Is promoting free trade through lambasting the Canadians and potentially rejoining the TPP the remedy to the current dairy crisis? The answer is no. Yet, instead of acknowledging this point that is apparent after analyzing the results of the Democrats’ free trade initiatives from the 1990s, Trump chooses to follow their policies and embrace their economic vision for rural America.

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