Dairy farmers to get direct cash payment as trade compensation

Canadian dairy farmers will get $345 million in direct payments in the first year of an eight-year, $1.75 billion support package. (John Greig photo)

Canadian dairy farmers will be getting direct cash compensation after the government gave up dairy market access to other countries in recent trade deals.

The compensation follows promises by the Trudeau government — and the Harper government before it — that dairy farmers would be compensated in some form for the loss of market.

Why it matters: The program will put $1.75 billion into the hands of dairy farmers over the next eight years, money that’s expected to help them adapt to changing market conditions.

The program is worth $1.75 billion and will compensate farmers for the close to five per cent of the dairy market given up in the Comprehensive Progressive Trans-Pacific Partnership (CPTPP) deal and the CETA trade deal between Canada and Europe.

A previous program, designed to aid farmers with technology adoption to help adapt to the CETA trade agreement with Europe, was heavily criticized because the only farmers who got funding were those with a current technology project underway, had the connections to get the applications in quickly and who had a bit of luck.

Many farmers looking for funds from that $250 million program did not get them. About 3,300 dairy farmers got funds from the program.

The new program aims to fund every farm, with payments expected to flow through the Canadian Dairy Commission and to be issued “in proportion to (farmers’) quota held.”

The payments to be made in the first year are budgeted to take up $345 million from the $1.75 billion funding envelope.

Federal Agriculture Minister Marie-Claude Bibeau made the announcement Friday at a Compton, Que. dairy farm.

“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,” she said.

Dairy farmers will be compensated depending on the size of their farm.

Farmers who milk 80 cows, for example, will receive a direct payment of $28,000 in the first year, for a total first year payment of $345 million.

The federal government said it “will continue to work with the Dairy Farmers of Canada to determine terms and conditions for future years.”

DFC said Friday’s pledge lines up with the recommendations of the working group of dairy farmer, processor and government representatives following the recent signing of the Canada-U.S.-Mexico (CUSMA) trade agreement.

“There is no doubt that conceding part of our domestic dairy market has had a major impact on the livelihoods of dairy producers,” DFC president Pierre Lampron said in a separate release Friday.

“While we are grateful for today’s announcement, we would have preferred no concessions to our domestic dairy production,” he said.

Prime Minister Justin Trudeau “has made another commitment: no further concessions would be made to our domestic dairy market in future trade negotiations,” Lampron added. “Our expectation is that he will keep that commitment as well.”

Bibeau on Friday “also reiterated the government’s commitment to the other supply-managed sectors,” the government said in its release.

Federal Conservative agriculture critic Luc Berthold on Friday described the Liberal government’s plan as “a cheque for the elections for milk producers, nothing for egg and poultry producers, and no firm commitment for direct compensation after 2019.”

The government, he said on Twitter, has “waited four years to deliver to producers a plan that the Conservatives announced four years ago… and waited until the eve of the election to make the announcement.”

— John Greig is editor of Farmtario.

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