Supply management is here to stay: Saunders

TORONTO — If Dairy Farmers of Ontario chairman Bruce Saunders were handed a crystal ball, he says dairy farmers would likely see a gradual reduction in blend price starting in five to 10 years and foreign milk coming in over a lowered tariff wall.

That’s the message Saunders has been spreading in recent meetings across the province. "The only alarm bell I have is that there are some risks on the horizon. We don’t know what the final (World Trade Organization) deal will be. If the current numbers on the table are the final numbers then (a lower blend price) is the impact and the new reality."

Despite alarmists crying that end of supply management is near, Saunders says there will be a supply management system in 20 years and quota will still be sold on the exchange. That said, Canada will sign a WTO agreement, even if the tariff wall is to be lowered, he said. "Canada is one of the larger trading partners. I can’t say that for the sake of supply management we can’t sign the deal."

Meantime, there’s a lot of hot air coming from Europe, including statements that Europe is phasing out quota. The European Union will abolish milk production quotas in 2014, the EU Agriculture Commisioner Mariann Fischer Boel told a Reuters news report last fall.

That’s one person talking and not the decision of the EU, said DFO spokesman Bill Mitchell. "93 per cent of milk produced is consumed in the country it is produced. Most countries have some sort of management system. It’s a commodity that doesn’t do well because of its cyclical nature without management."

Canadian farmers should not be alarmed by choices made in other countries, noted a Canadian official with Agriculture Canada. Other countries do not have the power to prevent Canada from deciding what to put on the "sensitive products" list to protect markets from foreign access, said the director of market access negotiations, Frederic Seppey.

In other developments, Canada will invoke Article 28 of The General Agreement on tariffs and Trade to block imports of milk protein concentrates.