Dairy farmers in Canada will receive $345 million in direct payments from the federal government in the first year of an eight-year, $1.75-billion compensation package to make up for concessions the governing Liberals made in recent international trade deals.
Canada’s 11,000 dairy farmers will receive payments in proportion to the quota they hold. In a press release, the government said the owner of a farm with 80 dairy cows will be compensated with $28,000 in the first year. Payments will come from the Canadian Dairy Commission.
The federal government plans to work with the Dairy Farmers of Canada to determine what the terms will be for the remaining seven years and $1.4 billion of the plan.
Agriculture Minister Marie-Claude Bibeau announced the details from a dairy farm in her Quebec riding on Friday.
“As promised, the compensation is deployed fully and fairly to allow everyone to make the best decisions based on the new market realities and their respective situations,” Bibeau said.
In this year’s budget, the government promised it would make up to $3.9 billion in compensation available to farmers in supply-managed sectors.
Some 3,300 dairy farmers are eligible to receive $250 million, which also falls under that package. That funding is being distributed to farmers over five years through the Dairy Farm Investment Program. Starting last year, farmers could receive up to $100,000 to upgrade their equipment.
Another $1.5 billion has been set aside for a Quota Value Guarantee Program to protect against the reduction in a quota value when it’s sold.
There remains $400 million of the $3.9 billion compensation package that has not yet been announced by the government. Katie Hawkins, Bibeau’s spokesperson, told iPolitics on Friday that that amount was earmarked for poultry and egg farmers, but later clarified that the amount that farmers in those sectors will receive is still being decided by a working group.
“The government remains committed to fully and fairly support all supply-managed sectors, including poultry and egg producers. Further details on the up to $3.9 billion allocated in Budget 2019 will be shared in due course,” Hawkins said in an email.
Both the Comprehensive and Economic Trade Agreement (CETA), Canada’s trade deal with the European Union, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the trade deal with 10 Asia-Pacific region countries, awarded trade partners access to a portion of this country’s supply-managed dairy, egg and poultry markets.
In the budget, the government said it will monitor the “potential future impacts” of the Canada-United States-Mexico Agreement (CUSMA), which awards the U.S. access to 3.5 per cent of Canada’s dairy market. Mexico has passed the legislation necessary for CUSMA to come into effect, but the U.S. has not. The Trump administration and U.S. Democrats in Congress have not come to an agreement on concerns over measures related to labour standards, climate provisions and the pharmaceutical industry. Canada hasn’t passed legislation necessary to ratify the deal, either, but the government says it plans to keep pace with the deal’s passage in the U.S.
The Dairy Farmers of Canada (DFC) predict that the access awarded through the three trade deals — CETA, CPTPP and CUSMA — will create a loss to domestic farmers equal to 8.4 per cent of the country’s milk production.
In a press release, DFC president Pierre Lampron said that although farmers are “grateful” for the newly announced measures, that they would have preferred Canada not surrender access in its trade negotiations.
“The Prime Minister has made another commitment: no further concessions would be made to our domestic dairy market in future trade negotiations. Our expectation is that he will keep that commitment, as well,” Lampron said.
The Liberal government’s plan has been closely compared to a $4.3-billion plan that Harper-era agriculture minister Gerry Ritz had promised would be distributed over 15 years if the Conservatives won the 2015 election.
Conservative agriculture critic Luc Berthold said in a press release on Friday that it is “shameful” that it took the Trudeau government four years “to come forward with the same plan that our previous Conservative government put in place.”