Under the supply management system, dairy farmers have quotas capping the amount they can produce. Ryan Remiorz / THE CANADIAN PRESS
Quebec farmers say they’re not worried about recent comments by U.S. President Donald Trump attacking the way Canada manages the production of dairy products.
“I think most farmers around here are taking everything that comes out of the U.S. with a grain of salt,” said John McCart, a dairy farmer and the president of the Quebec Farmers’ Association. “He’s under the impression that every time he speaks, people are going to jump and that’s not how it works.”
Speaking in Wisconsin on Tuesday, Trump singled out Canada’s treatment of U.S. dairy products as an example of unfair trade practices.
But farmers say they don’t think those comments will lead to changes here.
“Despite Donald Trump’s remarks, Quebec egg farmers are confident that their provincial and federal governments will continue to protect supply management in the upcoming NAFTA renegotiations, in keeping with the government of Canada’s long-term commitments and with recent statements made by Premier (Philippe) Couillard,” says Paulin Bouchard, president of the Fédération des producteurs d’oeufs du Québec.
Under the supply management system, dairy farmers, as well as those who produce chicken, turkey and eggs, have quotas capping the amount they can produce. Imports of those products, with some exceptions, are discouraged through a system of tariffs and import quotas.
Not everyone north of the border supports the supply management regime. Critics, like Conservative Party leadership candidate Maxime Bernier, who has called it a cartel, say the system has artificially increased the price of dairy, chicken and eggs.
Proponents of the system say it keeps prices stable and protects small farmers from seasonal fluctuations.
But critics argue it hasn’t worked. Between 1971 and 2012, the number of dairy farms in Canada declined by 91 per cent, according to a report written by former Liberal MP Martha Hall Findlay for the University of Calgary’s school of public policy.
François Dumontier, a spokesperson for Les Producteurs de lait du Québec, says that while Trump condemned the supply management system on Tuesday, he may have actually been talking about a separate issue.
“It’s unclear what Mr. Trump really had in mind. He went to Wisconsin, where it was in the news last week that one processor in Wisconsin lost a contract with a Canadian processor to produce diafiltered milk, which is a product that is specifically designed to be exported to Canada,” he says.
Diafiltered milk is a type of ultra-filtered milk that’s used in the production of cheese. Because it’s considered a milk ingredient, it’s not subject to the same tariffs as milk.
Dumontier says it was intentionally created to get around those tariffs.
“Diafiltered milk is not being used in the United States,” he says. “It’s specifically designed for our market.”
However, last spring Canadian milk producers came to a new agreement to price milk proteins, used for the same things as diafiltered milk, at a lower price.
“As far as we’re concerned, we still have the right to produce milk in Canada for processors in Canada and to have a competitive price,” Dumontier says. “There has been no change in regulation.”
Canada’s supply management system works well, Dumontier says, keeping prices and supply stable without the need for subsidies.
Dumontier says it’s ironic Trump is calling Canada protectionist when it comes to dairy, noting the U.S. system of subsidizing farmers has created a market that’s even more protectionist.
Eight per cent of milk consumed in Canada is imported, he says, compared to less than two per cent in the U.S.
“We protect a part of our market with tariffs, that’s true; they protect it with subsidies,” he says. “You cannot penetrate the American market and have a fair price for producers.”
While Trump also used the Wisconsin speech to criticize NAFTA, Dumontier says that the amount of milk imported to Canada from the United States has increased to 149,000 tonnes from 24,000 tonnes.
While Dumontier says he’s confident the Canadian government will support milk producers, he’ll be following Trump’s position on NAFTA and supply management closely.
McCart of the Farmers’ Association agrees.
“I don’t think farmers have anything to worry about,” he says.
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