The following article comes from www.farmcentre.com and is quite interesting. It also makes me think back to a conversation that we had with the Chairman of the CDC some weeks ago where he said that over the next 10 years, they expect to see the dairy industry go like the rest of the ag industry as a whole in that the least efficient producers would be gone and the current 18,000 or so milk producers would be reduced to about 1,800. Kind of flies in the face of why supply management was started in the first place, doesn't it, i.e. to protect the small farmer.
I'm not so sure that I want to see my milk coming from just a few sources any more than I want my meat coming from huge feedlots. Bigger is not always necessarily better.
Anyway, on the with commentary:
When the World Trade Organization recently ruled – yet again – that Canada’s export milk business is illegally subsidized, I was reminded of a conversation I had with a Nova Scotia dairy farmer last winter.
Why, he reasoned, would I want to sell milk for export at a price that doesn’t even cover my cost of production? More importantly, he said, a low-priced export industry undermines political support for the
domestic system of border protections, fixed high prices and production controls.
In fact, the Dairy Farmers of Canada argue that domestic prices don’t even cover the cost of production for most dairy farmers. Which might well prompt Canadians to ask why the industry wants to sell
milk products to American processors at prices 40 percent less than
they charge Canadian processors.
But the effort to build an export market for Canadian milk goes on unabated. This is the fifth time the WTO has ruled against Canada, but the government was quick to announce it would appeal the decision. It’s difficult not to draw comparisons with the unending U.S. attacks on the Canadian Wheat Board.
Meanwhile, the Canadian dairy lobby insists Canada's export policy is legal and must be defended, no matter what critics and the WTO
say. Undoubtedly, another WTO panel will be asked to offer its opinion on that.
But the bigger political and policy question is: Does it make sense to try to marry a protected domestic system to an export policy?
Wasn't the premise of supply management that if dairy farmers received first dibs on the lucrative and captive domestic market, it would control production to limit the vision to the domestic market?
Despite complaints that the present cost of production formula is not returning enough to farmers, milk producers are among the blessed in Canadian agriculture.
It is a hard-work, high-investment sector but Statistics Canada also says it has the highest profit margin in the business.
So why risk domestic political support for the small potatoes of cheap exports?
Why risk Canada's WTO stance as an anti-export subsidies
campaigner with a program the WTO calls an export subsidy?
There is no logical answer, unless the industry believes that supply management in dairy will eventually come to an end and the current export situation is training for the open-market fight to come.
For CBC commentary, I'm Barry Wilson, national correspondent for the Western Producer, in Ottawa.
I'm not so sure that I want to see my milk coming from just a few sources any more than I want my meat coming from huge feedlots. Bigger is not always necessarily better.
Anyway, on the with commentary:
When the World Trade Organization recently ruled – yet again – that Canada’s export milk business is illegally subsidized, I was reminded of a conversation I had with a Nova Scotia dairy farmer last winter.
Why, he reasoned, would I want to sell milk for export at a price that doesn’t even cover my cost of production? More importantly, he said, a low-priced export industry undermines political support for the
domestic system of border protections, fixed high prices and production controls.
In fact, the Dairy Farmers of Canada argue that domestic prices don’t even cover the cost of production for most dairy farmers. Which might well prompt Canadians to ask why the industry wants to sell
milk products to American processors at prices 40 percent less than
they charge Canadian processors.
But the effort to build an export market for Canadian milk goes on unabated. This is the fifth time the WTO has ruled against Canada, but the government was quick to announce it would appeal the decision. It’s difficult not to draw comparisons with the unending U.S. attacks on the Canadian Wheat Board.
Meanwhile, the Canadian dairy lobby insists Canada's export policy is legal and must be defended, no matter what critics and the WTO
say. Undoubtedly, another WTO panel will be asked to offer its opinion on that.
But the bigger political and policy question is: Does it make sense to try to marry a protected domestic system to an export policy?
Wasn't the premise of supply management that if dairy farmers received first dibs on the lucrative and captive domestic market, it would control production to limit the vision to the domestic market?
Despite complaints that the present cost of production formula is not returning enough to farmers, milk producers are among the blessed in Canadian agriculture.
It is a hard-work, high-investment sector but Statistics Canada also says it has the highest profit margin in the business.
So why risk domestic political support for the small potatoes of cheap exports?
Why risk Canada's WTO stance as an anti-export subsidies
campaigner with a program the WTO calls an export subsidy?
There is no logical answer, unless the industry believes that supply management in dairy will eventually come to an end and the current export situation is training for the open-market fight to come.
For CBC commentary, I'm Barry Wilson, national correspondent for the Western Producer, in Ottawa.
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