CHARLEBOIS: Dairy farmers getting holiday bonus
In haste, Agriculture Minister Marie-claude Bibeau chose a Saturday, hours before a longawaited economic update, to offer more NON-COVIDrelated compensations to supply-managed farmers.
They were expected, but how it was done was a little strange. Few in the industry knew what was going on before the announcement.
When giving money away, governments want as much media as possible. Not this time. Since it was done just before the update on our dreadful deficit, one must wonder if these sums are not intended to be blended with other pandemic-related expenditures.
What's $2 billion in funding when the deficit is more than $400 billion? It all seemed strangely improvised.
Egg and poultry farmers are getting what was expected, though, $691 million over several years. This is given in compensation for recent concessions made with Europe and Asia when trade deals were ratified. These sectors are highly integrated and competitive, so funds will be used wisely.
But dairy farmers are getting a holiday bonus. Instead of waiting seven more years to get the $1.75 billion promised last year, they will receive the bulk of their compensation package by the end of 2023. Direct payments will be given, more than $50,000 per farm per year.
As more people are trying to make ends meet when feeding themselves and their loved ones during the pandemic, each Canadian is giving $36 to asset-rich dairy producers.
The average dairy farm in Canada is worth almost
$6 million. That is why the announcement was made so quickly, on the weekend. Farmers in other sectors like grains, affected by embargoes and other trade issues, still get nothing, and their farms are not worth nearly as much.
In dairy, the ones directly affected by trade with Asia and Europe are dairy processors and artisan cheese makers. Since we are seeing more foreign products at retail, small cheese makers, dairy processors, goat cheese makers and other Canadian-made specialty products are losing market share.
But they still get nothing, not one dime, simply because they do not benefit from the same effective lobby dairy farmers have. Dairy farmers have a marketing budget exceeding $130 million a year. It is a monster of an organiza
tion, and very few appreciate this.
What needs to be underscored is that supply management is designed to compensate farmers for actual losses. When unpacking pricing formulas, compensation to dairy farmers is purely based on hypotheticals, and potential losses are unclear, at best.
Our entire dairy production system will essentially be overcapitalized.
Make no mistake, this is about politics, pure and simple. Funds should have been used to encourage some farmers to exit the industry right away to help the sector become more competitive. Funds given will now do the complete opposite, as underperforming dairy farmers will remain in the system for a few more years. We may end up making too much milk and witness the horror of milk dumping again.
Aging farmers will eventually leave the industry, but it is an expensive way to run an exit program. So much waste.
Most people do not understand how supply management works. Other than dairy boards themselves, most Canadians see supply management as some obscure method of keeping our country foodsecure. Bibeau clearly doesn't understand the system, and neither do many other politicians, public servants and, yes, dairy farmers. Most dairy farmers just want a fair price for their milk and couldn't care less about the system itself.
One reporter, during the announcement, asked how compensation levels were calculated.
Bibeau could only say that the formula was complicated.
In Canada, the ones who do understand how supply management works are trade negotiators. They know the politics of it. To sign trade deals, negotiators needed to buy peace with supplymanaged sectors, especially dairy. Canada offered to make concessions, not the other way around. Therefore, these co-called compensation funds are needed.
But we are not done yet. Ottawa is still on the hook for compensating farmers for NAFTA 2.0. Stay tuned.
For dairy farmers, trade deals are a gift that keeps on giving.