Too much cheese says Canada's dairy industry

Thursday, October 17, 2013

by SUSAN MANN

A federal government proposal to give the European Union access to 32 per cent of the Canadian fine cheese market as part of a trade agreement will quickly decimate the country’s small artisan and local cheese makers if the deal goes through, says a Dairy Farmers of Canada spokesman.

“We’re shocked by the volume of market access they’ve granted to the European Union,” says president Wally Smith, noting small processors and artisanal cheese makers across Canada have worked hard to develop the market and the federal government has just given it away. That’s unacceptable, he notes.

Ontario artisan cheese makers agree that amount of access will impact their business. Cheese maker Margaret Peters, owner of Glengarry Cheesemaking Inc. and Glengarry Fine Cheese, says she’s worried. The recent global recession ate into her business with sales dropping 20 to 22 per cent in 2011.
 
“That was a big hit to come back from but if this comes in then you’re going to see the same thing again,” she says. “The impact will be on the backs of the smaller cheese producers.”

A gouda-style cheese that Peters makes called Lankaaster recently won Supreme Global Champion at the Global Cheese Awards in England. The cheese was the top one among 167 categories. It’s the first time a Canadian cheese has won the honour since the awards have been given out starting in 1850.

Peters says she doesn’t know if there’s anything she can do to prepare for the increased market access for the Europeans. “At this level, you pay a really high price for the milk landed at your door. You’re already dealing with that.”

In addition, the cost of production for artisan cheese makers is higher than regular cheese manufacturers “because you’re producing less product but you’re producing premium product.”

Ruth Klahsen, owner of Monforte Dairy in Stratford, says the proposal will impact the Canadian fine cheese market because European cheese is cheaper than Canadian products and “they (the Europeans) make better cheese than we do.”

European farmers are subsidized so European cheese makers can produce cheese cheaper than Canadians, she adds. Klahsen has been making cheese for nine years and makes mostly French artisanal style cheese sold directly through farmers markets.

The proposed increased access granted to Europe won’t wipe out the artisan cheese industry but it will shrink it, she says. “I think there’s a percentage of people who are trying to buy local” and stuff raised close to home. But she doesn’t know how big the buy local movement is.

Klahsen wonders why people are surprised and upset by the government’s proposal because they voted the Stephen Harper government in “and knew that this was the kind of mandate he was going to run on.”

Al Mussell, senior research associate with the George Morris Centre, says some artisan cheese makers will be hurt by increased European access but the market is a growing one and, as such, “some product can come in but over time there is more opportunity remaining.”

He also notes there’s nothing to stop Canadian fine cheese makers from competing with the volume of access being given to the EU. “If we were willing to price competitively with the product that wants to come into the country, there’d be no reason why we’d lose any market at all.”

Dairy Farmers sounded the alarm Wednesday about what they’re calling a ‘tentative’ trade deal that has been reached between Canada and the European Union (EU). President Wally Smith says in a press release the government’s proposal gives the EU exclusive access to 32 per cent of the current fine cheese market. That amount is over and above the existing generous access the EU already has through the World Trade Organization agreement.

The federal government wouldn’t confirm that a tentative deal has been reached or that the EU has been given access to 32 per cent of the Canadian fine cheese market. Claude Rochon, spokesperson for the Department of Foreign Affairs, Trade and Development, says by email negotiations with the EU are ongoing. “We will only sign an agreement that’s in the best interests of Canada.”

The government has been clear, Rochon says. All three pillars of the domestic supply management system, production, import and price controls, must remain intact. “Our government has always defended the interests of our supply managed sector in our trade negotiations” and that approach has stayed the same with the EU trade talks.

Harper is scheduled to fly to Brussels today to meet with EU president Jose Manuel Barroso.

Smith says a person with authority told them late Tuesday night there’s an agreement in principle. Dairy Farmers of Canada’s executive is meeting Friday to map out its options and it plans to continue talking to government officials to “determine exactly how this is going to play out.”
As for whether the agreement in principle has been sent to the provinces for their approval and what Ontario will do, Mark Cripps, communications director for the agriculture ministry, says by email the provincial Ministry of Economic Development, Trade and Employment is in regular contact with federal negotiators. “As the negotiations wind down, we continue to work with the federal government to secure an agreement that reflects the best interests of Ontario.”

Dairy Farmers of Canada says as part of the WTO agreement, Canada allows imports of 20,412 tonnes of cheese annually tariff free and two-thirds of that amount is already allocated to the EU. If the EU trade deal goes through, it’s proposed that another 18,000 tonnes of cheese a year will be allowed in tariff free, all from the EU.

“This potential deal is a loss for Canadian dairy farmers and the industry,” Smith says. “It would take income from Canadian dairy farmers and their communities and give it to the European industry.”

Moreover, consumers won’t see a price difference resulting from the proposed trade deal’s “giveaway as the vast majority of EU cheese already comes into Canada with little or no tariffs,” he says. BF