Julaine Treur is a dairy farmer in Agassiz, B.C.
Disappointment and worry. That’s what dairy farmers across Canada, including myself and my family, have been feeling since news of the new trade deal – USMCA – broke late Sunday night.
This proposed deal will give access to 3.59 per cent of our dairy market to U.S. producers. More significantly, it forces changes to the way we price certain classes of milk as well as capping our export capabilities. This is much more substantial than what was given away in the last trade agreement - the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) - and therein lies much of the sting.
In recent years we have seen significant erosion of our market, with more foreign imports finding a place on our local store shelves. Both our trade agreement with the European Union known as CETA, and the CPTPP carved out significant chunks of the market.
Under the original Trans-Pacific Partnership (TPP), the U.S. had been given access to 3.25 per cent of our market. However, when President Donald Trump pulled America out of that deal, access to Canada was lost to the U.S. but remained for countries included in the new CPTPP, such as New Zealand and Australia. Rather than our government standing firm while negotiating USMCA and perhaps agreeing to a smaller percentage based on previous agreements, they caved and offered up more to one country than it had given to a collection of foreign interests in both CETA and CPTPP. Our Prime Minister and negotiators had promised our dairy farmers over and over again that they would defend supply management. This doesn’t look or feel like a defence of our industry. This is another erosion of the stability of our industry and it’s a kick in the teeth to Canada’s dairy farmers.
American dairy farmers are in dire straits. They produce much more milk than is needed in the U.S. and export a significant percentage to other countries, Canada included. The global dairy market is saturated: there’s simply too much milk. This has driven the price paid to American farmers below the cost of production, pushing many farms out of business.
It’s understandable then that Mr. Trump would look for ways to alleviate these problems. One way is to sell some of their excess production in Canada and undercut prices in this country. However, the access granted to our market in this new trade agreement will not significantly help American dairy producers, who have been overproducing huge amounts of milk - three states alone produce enough excess milk every day equal to all the milk produced in Ontario. Access to our market is just a drop in the bucket for U.S. producers and won’t significantly ease their woes.
Each foreign dairy product on store shelves displaces dairy produced here in Canada, by Canadian farmers for Canadian consumers. This affects Canadian jobs and the livelihood of our farmers and their families. In order to produce milk in Canada, dairy farmers must purchase a share of the market, commonly called quota. This quota is measured in kilograms and one kilogram of quota is roughly the amount of butterfat a cow will produce in one day. A kilogram of quota ranges in price from province to province, from around $20,000 to $40,000 per kilo. Our farmers have paid good money for the ability to produce milk for their fellow citizens and now another portion of our market has just been given away.
A good chunk of our monthly milk cheque goes to mortgage payments on this quota as well as on our land and buildings. That cheque will be smaller once this deal comes into effect as we will be forced to cut back production by selling some of the cows in our herd, but we will still be required to make the same payments to the bank for quota that will be taken away from us.
For us, on our farm, we will be forced to take another hard look at our finances. We’ll likely put some projects on hold and re-evaluate any significant farm-related purchases. We’ll continue keeping the same long hours and working just as hard as we always have. The cows will still come first. We’ll feed and milk them. We’ll do our farm chores, we’ll plant and harvest our crops, but we’ll be doing all of this for a smaller pay cheque. Is that fair? Would any other Canadian citizen feel that it is fair to be expected to do the same job and work the same hours that they have been doing for decades, but to be paid less just because our government caved to foreign interests and signed a trade deal? I think not.