Thursday, October 17, 2013

CETA Bad News for Dairy in Canada


From Dairy Farmers of Ontario: a listing of the preliminary impact.  I wonder what the Bankers are thinking?  Could this have an equity impact?  For now here are the issues.


DFO Responds to Proposed CETA Deal

October 17, 2013
CETA Deal Doubles European Access to Canadian Market & Hurts Canadian Dairy

On Tuesday, October 15, 2013, the Dairy Farmers of Canada (DFC) executive was notified 
that the Comprehensive Economic and Trade Agreement (CETA) negotiations between Canada 
and the European Union (EU) have concluded.

We have been informed that the EU will get an additional 17,700 tonnes of tariff free 
access for its cheese into the Canadian market (TRQ).

There are different ways to quantify the impact this will have on Canadian farmers and 
the Canadian dairy industry. However, it is very significant and represents at least 4.5 %
 of the Canadian milk produced for the cheese market and is approximately 2.25% of all 
milk produced in Canada.

In addition, the impact of giving increased TRQ to the EU represents a significant risk that
 even more market access will be given for the on-going Trans Pacific Partnership negotiations. 
 There is little doubt that the US, Australia and New Zealand will see this as an opening 
and pursue their interests aggressively; certainly for cheese and likely other dairy products, 
as well.

While the Federal Conservatives have stated they continue to support the 
Canadian dairy system, known as Supply Management, this deal does not support dairy farmers.

Giving Up Canadian Dairy

The Canadian dairy system provides safe, high quality Canadian milk products and 
supports a strong local economy. This deal compromises our system.

The CETA deal will cost our Canadian local dairy economy millions of dollars. This potential 
deal is a loss for Canadian dairy farmers and industry. It will take income from Canadian 
dairy farmers and their communities and give it to the European industry.  With this loss of 
farm income and squeeze on cheese makers, it is also taking economic development and 
jobs from Canadian communities.

Our farmers are demanding that the government matches its actions with its words by 
standing up for Canada and the Canadian dairy industry by not giving up our safe high
 quality Canadian dairy.

What the Deal Means in Numbers

What the Proposed Deal Could Mean for Canadian Dairy
  • The EU access will total 31,971 tonnes or 7.5% of the Canadian cheese market.
  • Total imports will reach 38,171 tonnes or about 9% of the current Canadian consumption.
  • The EU will have 63% of the fine cheese market in Canada. 
  • The additional access is equivalent to a 2.25% cut in farm quota.
  • That quota cut carries an estimated farm income loss of nearly $150 M
  • Farmers will then have to rationalize their dairy herd

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