With Canadian farmers already anxiously awaiting the final outcome of trade talks with the European Union, the Canadian government accepted an invitation in June to join Trans Pacific Partnership (TPP) negotiations.
While that’s potentially unsettling News for farmers of supply-managed commodities in this country, local MPs insist the federal government will defend supply management in trade talks – and local farm leaders are taking them at their word.
The TPP talks, which have been underway in their current form since 2005, involve the U.S., Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam, as well as Mexico, which joined the talks at the same time as Canada.
As a late entrant into the talks, Canada agreed to terms that prevent it from re-opening any issues on which the other partners have reached agreement. Since negotiations are not being conducted publicly, there is no way of knowing what has already been agreed upon.
“Any trade deal is worrying,” said Fergus area dairy farmer Ian Harrop.
However, Harrop, who is also a director for Region 6 (Dufferin, Peel, Simcoe and Wellington) of the Dairy Farmers of Ontario (DFO), said much of the concern about the risk to Canada’s supply management system in trade talks is media driven.
“We’ve been asking the federal government to support our position that supply management is not negotiable and they said ‘Yes’,” Harrop said.
“We’ve asked them, how does this affect supply management? Are we in jeopardy?”
Harrop said federal officials have told dairy industry leaders that “you enter into these agreements and everything is on the table and then everyone pulls back their sacred cows. The government has told us that supply management is not negotiable.”
Wellington Federation of Agriculture president Gord Flewelling said producers he’s talked to have also expressed faith in government promises on the issue.
“Everyone that I’ve talked to that’s on the supply management side is confident it will continue,” Flewelling said.
He added he hasn’t heard a great deal of concern about the trade talks from producers of either supply-managed commodities or non-managed commodities, and he said the WFA has not taken an official position on the issue “at the present time.”
In separate interviews with the Wellington Advertiser, area Conservative MPs Gary Schellenberger and Michael Chong both stated their government is committed to defending the system.
“We have been saying all along that we will protect supply management,” said Schellenberger, who represents the Perth-Wellington riding.
Chong, MP for Wellington-Halton Hills, said, “My understanding of it is that we are going to defend supply management at these negotiations and that the system will remain intact. We promised to do that in the last number of elections and I expect our government will keep that promise.”
While countries like New Zealand are expected to push for better access to Canadian markets for dairy products, Harrop says the perishable nature of the commodity provides some assurance for domestic producers.
“Once it comes out of the cow, it’s a race against time to get it to the processor, then into the grocery store, then into (consumers’) hands. Milk is a very perishable product.”
Those practical realities mean over 90 per cent of global milk production is consumed in the country it’s produced in.
According to the DFO most international trade in milk consists of “dumping of subsidized surpluses,” something Canada does not engage in.
Harrop points out that Canada’s supply management system, which involves production quotas and border controls, simply puts Canadian producers on a level playing field with heavily-subsidized farmers in other countries. About half of a US dairy farmer’s income, he says, comes from direct government subsidies.
“That’s something you don’t hear about,” he states.
Even New Zealand, says Harrop, has a large dairy co-operative “that is very successful and generates a lot of income for their farmers.”
While supply management does result in higher prices for consumers, Harrop says, it also means farmers are getting their income from the marketplace, rather than the tax base.
“There are no subsidy dollars that come from the government – zero,” he states.
Because economic support systems of some kind exist in virtually every country, Harrop says Canadian dairy farmers would be hard-pressed to compete without some protection.
“Either you get dollars from the government to keep you going, if you want food produced in Canada, or you need a mechanism like border controls so you can get enough money out of the market to make a go of it,” he said.
Schellenberger echoed Harrop’s position stating, “Most farmers that I know would rather get their money from the marketplace.”
Supply managed commodities are “probably the only part of agriculture that the government doesn’t have to assist,” Schellenberger stated.
While conceding that “everything’s up for discussion,” in the TPP negotiations, Schellenberger said that during previous trade talks his party has been consistent on the issue.
“We were firm on supply management.”
On a personal level, Schellenberger said, “There’s no one stronger in support of supply management than I am. People know where I stand. I haven’t changed my stance in all the years I’ve been in the federal realm. I support supply management.”
Schellenberger pointed out that agriculture minister Gerry Ritz confirmed the government’s support for supply management during roundtable discussions with local farmers from the Kitchener-Conestoga riding on July 4.
“The last bullet point that came out of (a government statement on the discussions) was that ‘we would be protecting supply management’,” Schellenberger said.
In the statement, Ritz highlighted government initiatives that are “helping farmers make their living from the marketplace, become more innovative, and better manage risk.” The list of initiatives included, “Strong and consistent defense of supply management.”
Both Chong and Schellenberger said Canada can achieve trade deals without sacrificing supply management.
“In any trade deal, there is never 100 per cent of the countries in agreement. Everyone is going to have things their country can protect. For us, maybe it’s supply management,” said Schellenberger.
“I think the negotiators that are at these discussions negotiating for Canada, these are not the first negotiations they’ve been involved with. I think that if it’s going to be a good deal for Canada, we can make an impact,” he added.
Chong said he is hearing two things from farmers in the riding.
Producers in supply-managed commodities, “would like the government to defend it,” he said.
“Producers who are not in supply management would like the government to develop and expand market access for their products.”
Chong said those two positions are not contradictory because Canada has always taken “a sector-by-sector approach to free trade.”
Chong noted Canada weathered the recession of 2009 better than much of the rest of the world because of long-standing restrictions on foreign investment in Canadian banks.
“I think we always take a sector-by-sector approach where questions of free trade and foreign ownership are concerned,” he said.
