This week I finished planting soybeans and now I’m waiting to see if they will all emerge. Of course I’m watching the soybean market too, as it is confusing our commodity markets with a little bit of drama. It’s getting dry in Ontario as well as much of the eastern corn belt. Who knows what the rest of the year will bring? Weather it is always the great equalizer.
Of course soybeans are emerging all across Ontario if they have enough moisture. However, they are not the only things emerging in the crystal clear spring morning air. Last Thursday morning we had tractors emerging across Québec and Eastern Ontario headed to Parliament Hill in Ottawa. I was aware that the protest had been called for Ottawa, but I didn’t know all the exact details. So when I saw the reports of tractors moving into the city on twitter, it caught my eye. 10 years ago I helped lead 10,000 farmers in protest on Parliament Hill. With the guys moving out again, my heart is always with them.
While 10 years ago we were fighting over an agricultural safety net for Canadian agriculture, this current fight is about the Canadian dairy economy. In fact, the protest today at Parliament Hill in Ottawa had 3000 dairy farmers and their supporters rallying to get government to move on their concerns. Simply put, these Canadian dairy farmers want loopholes closed from the CETA (Canada-EU Comprehensive Economic Trade) agreement and TPP, which according to them, threaten their livelihood as dairy farmers.
At stake of courses is Canada’s supply management system, which is increasingly being attacked by politicians from the federal Conservative and Liberal parties. This system was set up many years ago and dominates parts of eastern Canada. With the trade agreements brought by the previous federal Conservative government, loopholes emerged such as American diafiltered milk, which has begun entering Canada tariff free. For many Canadian dairy farmers this is just the opening act to changing the system altogether. In fact, it represents cracks in the current system partly brought about by the previous federal government. Canadian dairy farmers want Prime Minister Trudeau to put his boxing gloves on and fight back.
Of course there are many aspects to this. At one time in my career I was against supply management but I changed my mind. I think that supply management has some real issues, but I think that they can be dealt with in house. I think at the end of the day supply management is a system that brings wealth to rural Canada, especially in Québec and Ontario. I don’t believe we should sell milk like I sell corn. I think we have a made in Canada solution to overproduction in dairy, poultry and eggs and we should continue with it. However, in order to continue with it we can’t have cracks in the import wall. Otherwise, the whole thing will come crashing down. Regrettably, many politicians that don’t know the history or even the agricultural economics behind the policy are making it worse now through their own ignorance.
Then of course there is at $4.3 billion that was pledged to Canada’s dairy farmers by the previous Conservative government. The Treasury Board before the election never approved this and the Liberal party has not been friendly to this arrangement. It was always a generous arrangement put together by the previous conservative government. However, I’ve never believed that the Trudeau administration would honor that commitment.
There is a lot at stake here and it could get messy. The protests today in Ottawa were a continuation of protests by dairy farmers last year. It is ongoing and it will only grow if dairy farmers don’t see progress. The Québec dairy farmers are the most dynamic and well organized in Canada and they wouldn’t think twice of stepping up their pressure. Québec farm leaders have shut down highways in the past and they will certainly do it again.
It is also very complicated, drenched in Canadian history, Québec culture and the vagaries of the supply and demand for milk. It is also very politically sensitive in Québec, always the province that stirs the Canadian drink. However, even more than that the Canadian dairy farmers lobby is very powerful and very well connected. A lot of politicians in Ottawa owe them.
It is all a result of the race to cheap through successive trade agreements. In Canada previous federal governments either Liberal or Conservative put together trade agreements, which eroded supply management. Some of that has begun to bite such as the diafiltered milk from the US. While some sectors of Canadian agriculture wanted greater trade agreements, others did not want to be traded off. Needless to say, it happens and now the results are starting to hurt.
Simply put Canadian dairy farmers have issues and they are not only with government. There are problems at the processor level, as well as the long-standing barriers to entry to their own industry. The challenges are great, but the protests will continue. This thing will not go away easy.