by SUSAN MANN
The federal government needs to compensate Ontario cheese producers and processors for economic losses from the increased specialty cheese access granted to the European Union as part of the Canada-EU trade deal reached today.
Gabe De Roche, spokesman for Ontario Economic Development, Trade and Employment Minister Eric Hoskins, says, “we’re concerned about the impact this will have, especially on the specialty cheese sector.”
The province has also requested the longest possible phase-in for the implementation of cheese imports from the EU “to give our producers and processors more time to adjust,” he says. Another request is the federal government should provide funding for a marketing strategy for Ontario specialty cheeses, he says.
De Roche says Ontario hasn’t yet specified the amount of compensation that’s needed. “That’s a conversation that still needs to happen between us and the federal government.” The compensation should go to anyone, including farmers, who suffer losses as a result of the Comprehensive Economic and Trade Agreement.
While it has concerns for the Ontario specialty cheese and wine/spirits industries, the Ontario government is pleased with the agreement in principle. The deal is projected to create 30,000 jobs in the province.
Ron Versteeg, an Ontario dairy farmer and vice-president of Dairy Farmers of Canada, says during the negotiations the Europeans targeted the fine cheese market, which he described as the “jewel in the crown” of the total cheese market. “It’s higher value and more lucrative to them; more damaging to us.”
Dairy Farmers’ focus now is on assessing the potential damages from the trade deal and “ensuring that governments understand the true impacts,” he notes, adding they’ve been told this deal will take two years to finalize and there could potentially be a five-year phase-in period.
The agreement means EU cheese imports to Canada will increase to 30,000 tonnes from 13,000 tonnes.
Versteeg says he couldn’t comment on whether the federal government is considering compensating cheese producers and processors. As for Ontario’s request for compensation, he says “anything that can minimize the damage or soften the blow, that’s good.”
But the story this week, he says, is the trade deal will do some damage to the dairy industry.
In a press release, Prime Minister Stephen Harper called the deal between Canada and the European Union “the biggest, most ambitious trade agreement Canada has ever reached.” The deal provides Canada with preferential market access to the EU’s more than 50 million consumers.
The elimination of about 98 per cent of all EU tariff lines on the first day the agreement comes into force will translate into increased profits and market opportunities for Canadian businesses, Harper says.
The deal is a game changer for Canadian beef and pork producers. Grain farmers also stand to gain.
Gord Pugh, manager of federal government relations for Grain Farmers of Ontario, says tariffs on grains and oilseeds and the products made from them earmarked for the EU market will be eliminated. For example, the over-quota duty of 95 Euros a tonne on low protein wheat and the in-quota duty of 12 Euros a tonne will be removed by the end of the phase-in period.
“That’s very helpful for us,” he says, noting the tariff removal will result in more wheat being shipped to Europe from Canada.
Tariffs are also being removed on soybean oil and meal. Those tariff rates are four to five per cent of the value of the shipment. “That’s pretty significant when you’re talking a shipment of oil could be $3,000 a tonne,” he says.
There were substantive duties on flour, meal and baked goods that will also be axed. The result will be “more Ontario wheat and corn products would get sold to processors in Ontario and then shipped overseas,” says Pugh, who participated in a technical briefing today with Canadian trade negotiators.
Another positive development is a working group will be set up to look at biotechnology matters. “This is particularly important for soybeans,” he notes. “They’d look at things like expeditious approvals of GM (genetically modified) products that are commercialized in Canada.”
The grains and oilseeds industry was looking for two things from the trade deal. One was incremental market gains and the other was market maintenance. “The EU is, by far, the largest market for Ontario and Canadian soybeans,” Pugh says, noting one-quarter of the Canadian soybean crop heads to Europe. “This agreement should help in the maintenance of that market.”
Dave Solverson, vice-president of the Canadian Cattlemen’s Association, says they’re very pleased with the deal. “We’ve been working closely with the Government of Canada since 2009 to try to get a positive outcome.”
The agreement provides duty free access for 64,950 tonnes of Canadian beef valued at nearly $600 million.
In an Oct. 18 press release, the Canadian Pork Council notes the agreement provides tariff free access for processed pork products on the day the deal takes effect. For pork cuts, Canada will acquire a quota volume equivalent to more than 80,000 tonnes. The industry sees a market opportunity for shipping hams and other pork cuts to Europe.
Currently pork cut exports to the EU are virtually non-existent because of tariff and non-tariff barriers. But those will be addressed in the trade deal. The trade deal will give the Canadian pork sector meaningful access to the EU market and in a few years after it’s implemented the deal could lead to annual sales of $400 million.
The Ontario government has also requested compensation for wine and spirits producers for economic losses they incur, as they will be competing with a large number of similarly priced European products and their market share could potentially be cut.
De Roche says the deal calls for a change in how prices for wines and spirits are determined. “The result will be that expensive European spirits and wine will come down in price slightly and that will mean more competition for Ontario products that are at that same price point,” he says, noting they don’t know yet how much the losses will be.
The Wine Council of Ontario declined to comment.
Now that the Canadian and European Union governments have reached an agreement in principle on the trade deal both parties will conclude the formal agreement and do a legal review. Once the final agreement is signed, it needs to be ratified by the Canadian and European Union parliaments. BF
Comments
THIS WILL HAVE VERY LITTLE IMPACT ON THE CANADIAN MARKET AS IMPORTORS THAT ARE GRANTED NEW QUOTAS ,WILL MAKE THE PROFIT IF THERE IS ANY!!!! THE FARMERS WILL WHINE AND TRY AND GET MORE FREE TAX PAYERS MONEY ,THEY ALREADY HOLD THE CANADIAN CONSUMER AT RANDSOME AND MAKE THEM PAY DOUBLE FOR THERE DAIRY PRODUCTS!!! THAT IS WHY THE SMART CANADIAN SHOPPERS CROSS THE BORDER TO BUY ALL THERE DAIRY ,CHICKEN ,AND TURKEY FOR HALF THE PRICE AND BRING IN A MONTH,S SUPPLY AT A TIME !!!! THE REAL THREAT LIES IN THE FACT THE BIG FOOD CHAINS HERE CAN BRING IN ALL THERE FLUID MILK DEMANDS FROM THE U.S.A. ANY TIME THEY WANT DUTY -FREE BY HAVING THE U.S.A. PROCESSORS ADD A LITTLE BIT OF VANILLA TO THE MILK !!!THAT CHANGES IT FROM OVER A 200 % TARRIFF TO 0% OVER NIGHT ,THEY CAN ALREADY BRING IN ALL THE FLAVORED MILK THEY WANT AT 0 % RIGHT NOW !!THAT WOULD BE UP TO 50 % LOSS TO THE DAIRY FARMERS OVER NIGHT ,ALSO THEY CAN BRING IN ALL THE BUTERFAT REQUIREMENTS ,IN THE PUREST FORM KNOWEN AS BUTTER -OIL SURGAR BLENDS AND PROTEINS AS WELL KNOWEN AS ISOLATES !! THERE IS ALSO A LIST OF DAIRY PRODUCTS AND INCREDIENTS THAT CAN COME IN DUTY FREE AS WELL AT ANY TIME THAT WOULD CRIPLE THE DAIRY INDUSTRY IN CENTRAL CANADA ,WHERE THE MARKET IS UNDER THE NAFTA AGREEMENT !!!! THE DAIRY INDUSTRY WANTS TO KEEP PUSHING EVERY ONE AROUND ,JUST WAIT TILL WE ALL HAVE HAD ENOUGH WITH YOUR DEMANDS !!!!!!FOR 2 YEARS I BROUGHT IN EVERY THING I MENTION ABOVE THOUGH THE BORDER WITH NO DUTYS AND HAD LOADS CHECKED BY BORDER INSPECTIONS AND DROVE RIGHT ON THOUGH ,IN FACT MY SHIPMENTS WERE CLEARED BEFORE I HIT THE BORDER AND THEN SOLD TO CANADIAN SHOPPERS AT MY STORE TO SEE IF IT GOOD BE DONE AND IT CAN !!!! SO IF I WAS A DAIRY FARMER I WOULD THINK TWICE BEFORE DEMANDING MORE MONEY FROM CANADIAN TAX PAYERS !!!!! I EVEN HAD C.F.I.A. PEOPLE AT MY STORE CHECKING AND EVERY THING WAS WITH IN THE LAW ,I HAD BROUGHT IN WHITE MILK WITH VANILLA FLAVORED IN PINTS HALF GALLONS AND GALLONS , THE ONLY THING I HAD TO DO WAS HAVE FRENCH PUT ON THE LABELS !! I NOW OPERATE ON BOTH SIDES OF THE BORDER IN MY NEW BUSINESSES AND HAVE ALOT OF BUSINESS PARTNERS IN THE U.S.A. THAT IF THEY WANTED TO COULD INFLICT SERIOUS DAMAGE TO THE CANADIAN DAIRY INDUSTRY, AFTER ALL CANADIAN DAIRY FARMERS ALL LIKE TO SELL THERE ANIMALS IN THE U.S.A ,WITH OUT CARING WHAT DAMAGE THEY DO TO U.S.A. FARMERS !!!!!!!! BILL DENBY C/O THE NEGOTIATORS
Bill, while your post is generally correct, you made one big mistake. The price support is from consumers. It is a hidden tax in the price, the price is set by farmer/government boards. The dirty little secret is that quota is not in the COP, but we all know it is. Somebody has to pay for it. Raube Beuerman
There are two ways to help Canadian cheese makers who might be adversely affected by a proposed EU trade deal - one is to pay them a deficiency payment based on what they produce, and the other is to sell them milk for the world price, which is what frozen pizza makers already pay.
The first gives cheese makers no incentive to do anything but loot the public purse, while the second is the sensible way to help them deal with the new reality.
Or, to look at it another way, why should public money be used to subsidize cheese producers when the real problem is the exorbitant price dairy farmers force them to pay for milk?
Stephen Thompson, Clinton ON
Finally, someone has it right. The problem is not the EU, it is the fact that our cheesemakers have to pay inflated prices here, and it is all due to the supply managed farmers too busy making quota payments, and inflated land/asset payments. The value of quota is for the most part, merely a reflection of the profits to be had, and enough to lock out newcomers. And Versteeg was on CBC 2 days ago claiming that EU farmers are subsidized 40% and we can't compete with that-oh really. If the market price of milk at the farm gate in the EU was about 40 cents for example, then the farmer would be subsidized up to a price of 56 cents. Yet here, the farmgate price is close to 75 cents. I will also add, that if the EU farmers are so highly subsidized, and so profitable as Versteeg makes it sound, why have so many left and came here for the monopoly? Raube Beuerman, Dublin, ON
Better check your "Caps" button,its stuck!
Most Ontario dairy farmers sell Cows/heifers at the local Sale barns, what US buyers do with the animal is not our concern, nor should it be.
Of course they are yelling. The haters on here feel they have won there battle. It is best to ignore them and let them enjoy their moment.
MY CAPS BUTTON IS NOT STUCK ,HOW MANY DAIRY FARMERS HAVE SOLD THERE HEIFERS AND COWS TO THE U.S.A. OVER THE YEARS FOR MORE MONEY THAN THEY COULD GET HERE !!!!!!! INSTEAD OF BUYING THAT LICENCE TO PRINT MONEY, CALLED QUOTA !!! NEVER THINKING ONCE ABOUT THE DAMAGE CAUSED TO FARMERS IN THE U.S. WHY SHOULD FARMERS IN THE U.S. CARE WHEN THEY TAKE YOUR MARKET !! I CAN TELL YOU I THING ,IT IS COMING !!!!!!!! ENJOY IT WELL YOU CAN; RIPPING OF CANADIAN TAX PAYERS !!!!!!!! YOU ARE NOT GOING TO WIN THIS ONE !!!!!! BILL DENBY C/O THE NEGOTIATOR,S
Yes, we will lose Supply Management..yadda yadda etc. l was on Paraliment Hill about 20 years ago with about 40,000 other SM supporters and some of us thought the same thing back then, but again that was 20 years ago!
You remind me of a time years ago when a local heifer dealer drove in the yard with this big Texan looking to buy heifers.l had about 12 in a little paddock by the barn and of course he wasn't interested in the ones l wanted to sell,instead he picked the nicest of the bunch and said "l'll take that one"and offered a good price (a pre-BSE price) it was a heifer l had no intention of selling so l said "No".
l will always remember the look on that guys face...Please don't tell me about the harm we are doing to the US.
People are always at their most-smug, and most-dismissive, just before they lose their legislated entitlements - the only thing supply management opponents have ever got wrong, and continue to get wrong, is the timing of the end of supply management.
In addition, 35,000 of the 40,000 people you claim were on Parliament Hill to support supply management in 1992, won't do it again, and if anything, they'd go tomorrow to any rally to end supply management. That's because, ever since 1992, supply managed farmers have thanked their neighbours for their support by walking all over them at every turn, and continue to, completely-unapologetically, do so now.
Stephen Thompson, Clinton ON
Well why don,t you get a group of 40 to 50 thousand people together to protest the SM way of farming?
Comment modified by editor
WHILE WE ARE ON THIS SUBJECT, I HAD DESIGNED A PROGRAM WITH THE FEDERAL DEPARTMENT OF AG AND DIFAT FOR EXPORT PRODUCED MILK ONLY,TO SUPPLY MILK FOR EXPORT DAIRY PRODUCTS AROUND THE WORLD!!!THAT WAS TRADE COMPATABLE UNDER GATT AND HAD TO GO ALL THE WAY TO THE SUPREM COURT OF CANADA AGAINST THE ONTARIO GOVERNMENT AGENGY DFO ONLY TO BE DENIED THE RIGHT TO BE HEARD !!THE REASON WHY IT WAS NOT HEARD ,IS WE WOULD OF WON AND THERE WAS NO WAY IN HELL THE PROVINCES WERE GOING TO GIVE UP CONTROL OVER MILKAND THE FARMERS!!!! ALSO THEIR ASSET CALLED QUOTA WOULD HAVE BEEN WORTHLESS AND THEN ANYONE WHO WANTED TO PRODUCE MILK COULD FOR NOTHING !!!!! SO NOW THIS WAY THE FEDERAL GOVERNMENT CAN DO BI-LATERAL TRADE AGREEMENTSWITH OTHER COUNTRIES AND GIVE ALITTLE AT ATIME WITHOUT HAVING TO PAY THE PROVINCES ANY MONEY FOR QUOTA,AS THEY OWN IT,NOT THE FARMER!!!! THAT IS THE LAW,FARMERS DO NOT OWN QUOTA ,THEY ONLY GET TO BUY THE USE OF IT AND YOU CANNOT GET COMPENSATION ON SOMETHING YOU DO NOT OWN !!!!!HOWS THAT FOR THE FACTS AND INSTEAD OF PUTTING IN PLACE A PROGRAM FOR EXPORT MILK ONLY ,THE PROCESSORS IMPORT ALL THEIR MILK FROM THE U.S.A. UNDER A PROGRAM CALLED MILK FOR REEXPORT OF FINISHED PRODUCTS !!SO THE FED GOT WHAT THEY WANTED ,JUST USE U.S.A. MILK , NOT BAD AND YOU THINK YOUR BEING PROTECTED !!!!!! good luck!!!!!!!! BILL DENBY C/O THE NEGOTIATOR,S
Really?? Lets consider that most dairy/chicken farmers have no issue cash cropping and driving the price of land up to do so. I think the growing theme amongst the non SM farmers is we are sick of the double standards. Congrats to Harper for considering the bigger picture.
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