USMCA Leaves Canada’s dairy sector behind

Oct. 3, 2018

(Westmeath, ON) This morning, the sun rose on a new trade agreement. NAFTA is in the archives, and USMCA is the new deal. As I walked around the barn milking the cows and feeding calves, it was obvious that, for the cattle, nothing had changed. Yet for dairy and other supply managed farmers a significant change has occurred.

In USMCA, Canada will allow another 3.59% access for dairy plus poultry and egg concessions; the removal of Class 7 pricing which priced Canadian milk proteins on par with the US class equivalent; and the US retains the power to have input into Canadian dairy policy. The Canadian government has promised compensation for the supply management sectors to make up for market losses, but for an agriculture sector that has not relied on any government subsidies and has taken pride in their sustainability, dependence on a government handout is uncomfortable.

In the past, the US has been creative in by-passing trade agreement commitments. In the early 2000s, it was butteroil/sugar blends. More recently, it was diafiltered milk, breaker eggs, and spent hens. With diafiltered milk, the dairy boards asked for the federal government to implement border controls, but that would have led America to challenge Canada at the WTO. The creation of Class 7 milk was a way to allow Canadian farmers to compete with diafiltered milk products. Now, with the elimination of Class 7 milk, the same as US Class 3 in both price and product, Canadian farmers are being displaced in their own market. Additionally, milk classes are also the purview of the provinces where the federal government has no control.

America has pushed for and achieved freer movement of agriculture products to both Canada and Mexico, but they have not given up any protection of their sugar and cotton industries. Canada did stay firm on retaining Chapter 19 and Chapter 20 which call for an independent third party to resolve trade irritations instead of the US preference to adjudicate in the American court system. A process that Canada felt was not transparent and independent.

Of all the commodities, services, and rules to abide by in a trade agreement, food and its production are the most precious. In the months leading up to NAFTA 2.0, Canadian farmers have been asking consumers to check food labels and buy products labelled “100% Canadian Milk.” Those purchasing food have been answering the call, and a true symbiotic relationship has evolved, But, there remains a gaping hole in label regulations for fast food, bakery products/complete foods, and frozen prepared foods. All Canadians, eaters and growers, need to demand that those products identify where their ingredients are sourced from, so consumers can make informed choices and support Canadian farmers.

Tony Straathof is a dairy farmer in Westmeath, ON and the Treasurer of the National Farmers Union – Ontario. He can be reached at 613-587-4343 or straath@nrtco.net