Canada's dairy farmers, ensconced behind towering tariff walls, have long enjoyed near-exclusive access to captive Canadian consumers. But here and there, there are new breaches in the ramparts. Imports of milk- and cheese-related products – "milk protein isolates," "milk protein components," "solids-not-fats components" and skim milk powder – are slowly but surely liberating Canadians from the supply management regime long favoured by this country's dairy-farmer organizations.
Canada cannot isolate itself from the world market in milk products – selectively or otherwise – in an age in which there is a vast range of products ultimately made from milk but consumed in manifold different forms by Canadians and everybody else.
A paper prepared for the Dairy Farmers of Ontario and obtained by The Globe and Mail observes, for example, that imports into Canada of milk protein isolates "have grown from 3,500 tonnes per year in 2005 to 20,985 tonnes in 2014." One result of this small opening in the market is a wasteful, outright pouring away of much surplus Canadian milk production.
Canada has long been part of NAFTA, and a new trade agreement with the European Union should be in effect in 2016. Canada is also part of the Trans-Pacific Partnership negotiations, in which agriculture is taking centre stage. All points to ever greater trade liberalization.
The DFO paper's authors hope for the setting of a "competitive world price" and for a strategy of exporting Canadian milk products – while at the same time continuing to protect the Canadian market from foreign imports. But what countries would be content to accept any and all Canadian milk-product exports, while Canada keeps up its own milky and cheesy barriers? International trade negotiations are usually a matter of reciprocity, after all.
Europe has been through all of this, from postwar subsidies, to milk lakes and butter mountains, then to a milk-quota regime that provoked angry demonstrations, in which "excess" milk was literally poured down drains. All this is finally being ended this year. The path forward for Canada's dairy industry is clear.