Supply-managed Canadian dairy farmers will get their fourth and last direct payment from the Dairy Direct Payment Program. This programme is meant to help producers who have been hurt by the government’s CETA and CPTPP trade deals.
Under CETA, the trade deal between Canada and the European Union, the EU’s share of the Canadian cheese market went up by 18,500 tonnes, which, according to the National Farmers Union of Canada, means that Canadian dairies will lose 185,000 tonnes of fluid milk production. The Dairy Processors Association of Canada thought that dairy producers would lose about CAD670 million (USD490 million) in market share and investment returns. According to Dairy Farmers Canada, under CPTPP, Canada’s free-trade deal with 10 Asia-Pacific countries, including major dairy exporters like Australia and New Zealand, Canadian dairies would lose CAD160 million per year.
For the first three years of the Dairy Direct Payment Program (DDPP), the government gave up to CAD1.28bn (USD940m) to the country’s dairy producers as compensation. The fourth and final round was worth CAD468m (USD343m).
Farmers who qualify get money based on how much milk they produce. For example, the owner of an 80-head dairy farm will get CAD38,000 (USD27,880). Before March 31, 2023, producers must sign up with the Canadian Dairy Commission in order to get paid.
Future compensation
In its 2020 pre-budget submission, DFC estimated that the market access granted by CETA, CPTPP, and CUSMA would cost Canadian farmers an average of CAD450m (USD330m) each year in income. The group also said that by 2024, 18% of Canada’s dairy production will come from outside the country.
So, the Canadian government has been asked to come up with a plan to give affected producers more money through a new package of compensation, this time to deal with the effects of the Canada-United States-Mexico Agreement (CUSMA).
In the Fall Economic Statement for 2022, the state promised dairy farmers up to CAD1.2bn (about USD879m). Under the DDPP, the money will be given out from 2024 to 2029. The ministry said that farm owners with a herd of 80 milking cows could get a direct payment of about CAD106,000 (USD77,700) over six years, with each payment being less than the last.
Bibeau said, “We made a promise, and we kept it.” “Our government promised that after trade agreements were signed, supply-managed sectors would be fully and fairly compensated.
“The payment at the start of 2023 is the last part of the dairy producers’ compensation for CETA and CPTPP. From the beginning of next year until 2029, they will be paid for CUSMA. I also reaffirm that our government will not give up any more market shares as a result of supply management in future trade talks.”
Launch of the Sustainable Agriculture Strategy consultations
In other news, Minister Bibeau has started a process to come up with a plan for sustainable agriculture (SAS).
SAS will help farmers make a living while also helping to cut down on pollution. The strategy will be made with the help of the agricultural sector, and provinces and territories will be involved in the planning process.
There will be public meetings and targeted workshops, as well as an advisory committee made up of producers and people from the sector. The goal is to finish the plan in the coming year.
