World dairy producers cry foul over Canadian milk products deal

Dairy producers in Australia, the European Union, Mexico, New Zealand and the United States have teamed up to threaten a trade war over a new deal between Canadian farmers and its dairy industry. By Peter Kuitenbrouwer
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In a letter made public Monday, the dairy councils that represent the bulk of the world’s milk producers says the new deal will keep out foreign “dairy ingredients” and put subsidies in place that will help Canada “unfairly compete with our products in third country markets.”
Jaime Castaneva, a senior vice-president at the U.S. Dairy Export Council in Washington, D.C., which represents about 100 U.S. dairy co-operatives and manufacturers, said that his group wants Ottawa to quash the deal before it takes effect, to avoid a long and costly dispute at the World Trade Organization.
“It’s the same old story with respect to Canada,” Castaneva said. “Twenty years ago the U.S. and New Zealand took Canada to the WTO. This new ‘special class’ of milk has the same principles as the program 20 years ago. It’s all about preventing imports and dumping milk in international markets.”
Under Canada’s supply management regime for milk, steep tariffs protect Canada’s dairy farmers from imports of most dairy products. But in recent years Canada’s cheese makers, for example, have taken to importing what’s called “ultra-filtered milk,” a kind of syrupy milk that is not on the tariff list, and which therefore enters Canada tariff-free.
The new deal, on which dairy farmers and dairy processors shook hands over the summer, creates a new class of milk called “class six,” which farmers will sell to processors at low prices to wipe out the imports of ultra-filtered milk.
Trade rules prevent Canada from selling milk overseas any cheaper than producers sell it within Canada. By creating “class six,” the dairy farmers argue that they can then sell their surplus milk, mostly skim milk powder, at cheap prices overseas.
“The bigger problem in Canada is a surplus of protein,” said Castavena. “They are proposing to dump it in the international market.”
The Dairy Farmers of Canada and the Dairy Processors Association of Canada came to a deal in July in Prince Edward Island, and said in a news release at the time that they would make details public once each province’s dairy farmers, and all processor groups, had voted to ratify the plan.
On Monday Isabelle Bouchard, a spokeswoman for the Dairy Farmers of Canada in Ottawa, said she could not discuss the details of the deal until after everyone approves it.
“It’s a surprise that these groups are acting because the deal has not been ratified,” Bouchard said. “They are jumping the gun.
“Democracy has not spoken yet. We will not discuss this deal in public until the members have ratified it. What they (the foreign milk producers) are talking about is just created in their own minds,” she said.
“How could dairy farmers subsidize anything? For a subsidy you need governments. And this deal does not involve governments.
“The auto industry is subsidized by Ottawa,” she added. “The dairy industry gets no subsidy from Ottawa.’
She said Canada’s dairy farmers have railed for years against imports of ultra-filtered milk.
“We have been surveying Canadians for two years, and Canadians want Canadian milk,” she said.
 
Source: FinancialPost
Link: http://business.financialpost.com/news/agriculture/world-dairy-producers-cry-foul-over-canadian-milk-products-deal

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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