Canadian dairy farmers to get $1.75 billion due to impact of trade deals

Ottawa has announced $1.75 billion in compensation for Canadian dairy farmers to offset a loss of market share resulting from free trade agreements with Europe and countries on the Pacific Rim.

Canada's approximately 11,000 dairy producers, about half of whom are in Quebec, will receive the money over eight years, with $345 million to be distributed this year.

The sums will be allocated according to producers' quotas, with an average farmer with a herd of 80 cows receiving $28,000 in the first year.

Agriculture Minister Marie-Claude Bibeau, who made the announcement Friday on a farm in Compton, Que., promised a similar program when the Canada-United States-Mexico Agreement comes into force.

"This will allow everyone to make the best decisions based on new market realities and their respective situations," said Bibeau. "The Canadian dairy commission should be mandated to proceed with these payments as soon as possible. We understand dairy farmers want direct compensation. We will continue to work with the Dairy Farmers of Canada to better terms and conditions for future years."

Bibeau added her party has committed to no longer cede market share in the dairy sector in future international free trade negotiations. Dairy Farmers of Canada CEO welcomed that announcement, saying Canadians want to buy products made within the country. 

"For Canadian consumers, they need to understand whenever we concede market, it's milk that won't be produced here at home, being produced by producers elsewhere, in other countries," he said. "Those products are making their way onto shelves for consumers here in Canada. Consumers we know want dairy products that are made here at home."

The Liberal government's March budget earmarked $2.15 billion to help farmers who lose income because of the trade deals with Europe and the Pacific Rim, both of which make it easier for foreign egg, dairy and poultry producers to enter the Canadian market.

Jacques Lefebvre of the Dairy Farmers of Canada was pleased with the announcement.

"This is a good announcement today. Clearly the trade agreements have had a huge impact on dairy farmers across the country," he said.

Hinchinbrooke dairy farmer Jason Erskine said compensation could have been avoided.

"If it weren't for the Canadian government giving up market access, we wouldn't require any of this money. This money could have stayed in the pockets of Canadians," he said. "The problem with giving market access it isn't that ok we're going to compete with them for that market, it's that they have it it's given to them so they're guaranteed to have that spot on our grocery shelf."

Ottawa is promising support for dairy producers once the deal between Canada, the U.S. and Mexico comes into force.

"The federal government is committed to fully and fairly supporting dairy producers for the new free trade agreement with the United States and Mexico, should it be ratified," said Bibeau. "Our government has also committed to not giving any more concessions for the dairy sector in upcoming trade negotiations."