The Trans-Pacific Partnership (TPP) agreement, which was concluded earlier this month on Monday, Oct. 5 in Ottawa after five years of negotiations, includes a free trade agreement with 12 Pacific countries that is considered to benefit Canada’s economy.
The countries in the agreement are Canada, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore,United States and Vietnam.
According to Jan Stomp, president, National Farmers’ Union (NFU), the biggest mistake farm leaders and dairy farmers ofCanada are making is accepting and approving compensation packages.
“This is the first time that a trade agreement is weakening supply management and the federal government offers compensation to producers,” said Stomp. “This principally destroys the fact that Canadian supply management does not need subsidy, as the three pillars of supply management of import control, production discipline by producers (always enough milk, never too much) and rewarded with cost of production is a formula, which doesn’t need government subsidy or bailout.”
Explaining his perspective further Stomp added, “Dairy producers in Canada produce under a stringent quality control system, No bovine growth hormones are permitted in Canada and thereby allowable bacteria count in raw milk are substantially lower in Canada then the US.”
But with the implementation of TPP, this will no longer be the case.
“Hypocritically, when it comes to trade, all of a sudden these lower standards somewhere else are not allowed to form a barrier between domestically produced better products versus inferior product imported,” said Stomp.
However, most cattle and dairy farmers have reacted to the agreement sceptically as they try to make sense of the full impact.
“The full extent of the TPP agreement, with all its details, is not yet known, but the first reaction from a dairy farmer’s perspective is one of disappointment, to have allowed any concessions,” said Heini Hehli, a dairy farmer. “However, I have to say that it could have been worse, because the Canadian dairy farmers face a lot of challenges, in terms of pricing, imports and new technology.”
Explaining his stand further, Hehli added that a lot of the dairy imports come from world regions where production costs are a mere fraction of Canadian production cost because of warmer climate or cheaper labour.
“A Canadian dairy producer cannot compete with those costs, and also some dairy imports are subsidized by the governments, in order to make exports cheaper into Canada,” said Hehli. “Besides, new technology in the dairy product manufacturing is a real challenge for dairy producers, an area where we as dairy farmers have to adapt our production.”
Whether the TPP is any different for cattle farmers, Wayne Skocdopole, a Big Valley cattle rancher weighed in, and said,“Hopefully it will eventually create more markets for our livestock, which will in turn put more dollars in the producers’ pocket.”
“I don’t think this will have any immediate effect, it will be a process that happens over time,” said Skocdopole.
According to the TPP agreement, Canadian products will have preferential market access to all TPP countries, ensuring thatCanadians have a competitive edge over competitors outside TPP, from producers to processors.
But Skocdopole feels “there is no way of knowing how true it is until things start to happen. Looks good as a policy,hopefully it will create good change over time.”
For Jan Stomp the repercussions of such an agreement have far-reaching consequences.
“The chaos in the international dairy market, with prices way below cost of production everywhere, comes from a relentless push for unregulated supply of milk, endless growth of New Zealand milk output, drastic reduction of import by China,liberalization of supply restrictions in Europe and steady growth in US output,” said Stomp. “This is the cause of failing economic conditions for dairy farmers everywhere, and Canadian dairy farmers, who are absolutely not the cause of this economic failure are asked to solve the problems by sacrificing their system that ‘does’ work for farmers and citizens alike.”
According to Stomp, dairy farmers of Canada are “expressing relief” about production cuts of only three and a quarter percent for this round and the compensation for loss of income and quota values.
“The federal government has only been forthcoming with a limited part of the whole TPP text, part of the reason for limited information being the negative impact its full revelation may have on the federal election outcome on Oct. 19,” addedStomp. “Ontario and Quebec are the largest dairy producer provinces and Conservative verbal support for supply management is translating into votes.”