There may have been a few doubting Thomases (And Prinzens and Byfords and Thompsons and…) when the federal government told dairy, chicken, egg and turkey farmers that they would be compensated for concessions made during international trade negotiations that allowed foreign access to domestic markets.
The Government of Canada made good on that pledge to producers that rely on supply management agreements this weekend when they announced a full and fair compensation package for market access concessions made under the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The Honourable Marie-Claude Bibeau, Minister of Agriculture and Agri-Food called Canada’s supply-managed dairy, poultry and egg farmers “part of the backbone of the Canadian agriculture sector and the Canadian economy.”
“They continue delivering the best quality products to the kitchen tables of Canadians, despite challenges presented by the COVID-19 pandemic. The strength of Canada’s supply management sector is essential to the vitality of our family farms and rural regions from across Canada,” she said.
In August 2019, Minister Bibeau announced that $1.75 billion would be provided to compensate Canadian dairy farmers over 8 years. Between December 2019 and January 2020, more than 10,000 dairy farmers received a cash payment of $345 million. On Sunday, the Government has set a schedule to deliver the remaining $1.405 billion through direct payments to farmers over a timeline of only three years.
Dairy farmers will receive, on the basis of their milk quota, cash payments of $468 million in 2020-21, $469 million in 2021-22 and $468 million in 2022-23. The owner of a farm with 80 dairy cows will be awarded an approximate compensation in the form of a direct payment of approximately $38,000 each year. These amounts also build on the $250 million CETA on-farm investment program, and provide certainty on the schedule and form of remaining payments in the $2 billion total compensation package for dairy farmers.
During negotiations for the Canada-United States-Mexico Agreement (CUSMA), the Government defended supply management from American efforts to dismantle it. In the recently concluded agreement with the U.K., the Government defended Canada’s supply management system, and will continue to do so in future discussions with the U.K. The Government has been clear that there will be no more concessions on supply management in future trade negotiations.
The Government is also announcing $691 million for 10-year programs for Canada’s 4,800 chicken, egg, broiler hatching egg, and turkey farmers. Responding to sector demands, these programs will drive innovation and growth for farmers. Program details will be designed in consultation with sector representatives and launched as soon as possible.
Furthermore, the Government of Canada remains committed to engaging the sector on full and fair compensation for the Canada-United States-Mexico Agreement (CUSMA), and to processors of supply managed products.
“We know how fundamental the supply management system is for farm families,” said Bay of Quinte MP and Ministry of Agriculture and Agri-Food Parliamentary Secretary Neil Ellis. “We know firsthand the contributions family farms make to our rural economies and the vitality of our communities. That’s why we promised to deliver full and fair compensation as a result of recent trade agreements – and are doing just that. I am deeply committed to continue working closely with our farm families and protecting the supply management sector.”
Agri-food industry leaders championed the announcement. In 2019, there were 10,371 dairy farms in Canada, supporting close to 19,000 direct jobs on farms and Pierre Lampron, President of Dairy Farmers of Canada said the finalization of the agreement will provide dairy farmers a better degree of certainty moving forward.
“The level of certainty provided by this announcement enables us to be in a better position in terms of innovations and efficiencies to better compete with increase imports of dairy products made from foreign milk.”
The over 4,000 producers of chicken, broiler hatching eggs, turkey, and eggs in Canada generated over $4.9 billion in farm cash receipts in 2019 and 7.4 percent of all farm cash receipts in Canada. According to industry, Canada’s poultry and egg sector supports more than 140,000 direct and indirect jobs and while dairy might get the lion’s share of local noterity, there are a number of poultry agri-businesses in Prince Edward County
“Canada’s 2,877 chicken farmers appreciate the announcement today on mitigation measures stemming from the CPTPP. Farmers have waited a long time to see action on this file, and we believe that this is a step in the right direction. We look forward to continuing our work on the investment and market development programs for our sector,” said Benoît Fontaine, Chair of Chicken Farmers of Canada
Because of the downturn of the restaurant and food service industry during the COVID-19 pandemic, the Government of Canada helped dairy farmers deal with the resulting surpluses of products like cream, by increasing the borrowing capacity of the Canadian Dairy Commission by $200 million. This gives the Commission added capacity to purchase excess perishable products like cream and convert them into longer lived ones like cheese in order support producers and reduce food waste during market disruptions.
Once fully phased-in, concessions made under three trade deals (the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the CUSMA), as well as World Trade Organization commitments, are estimated to be equivalent to approximately 10 percent of Canada’s current milk production.