United States President Donald Trump has taken aim at the Canadian dairy industry, calling treatment of American dairy farmers “unfair.”
Ian Harrop, Centre Wellington dairy farmer and Dairy Farmers of Ontario board member, says the industry is staying calm, but Trump’s comments are “totally wrong.”
Trump, speaking at an event in Wisconsin on April 18, said, “in Canada some very unfair things have happened to our dairy farmers.”
His comments seem to refer to a policy change that affected milk classes in the existing supply management.
The Canadian dairy industry is regulated by a system of supply management, which protects the domestic industry with tariffs on imports. However, there are some products, such as milk protein concentrates and ultra filtered milk, that are allowed from the U.S.
Harrop explained Canadian dairy farmers created a new class price for milk protein concentrates to be competitive with the milk coming in from the U.S. and now Canadian producers are using domestic products instead of buying them from the U.S.
“That’s what’s got the president all upset – that the U.S. dairy farmers have lost a market,” said Harrop.
An April report on foreign trade barriers from the American government mentions the new class as a concern.
“The United States has raised its serious concerns with Class 7 … and is examining these milk classes closely,” states the report.
It also notes the new milk class that provides Ontario processors skim milk solids at discounted prices aims “to undercut the price and displace current sales of U.S. dairy ingredients.”
Harrop said it is about being more competitive in the market.
Dairy Farmers of Ontario spokesperson Laural Adams said, “contrary to any suggestion that Canada is protectionist, the U.S. enjoys a significant dairy trade surplus with Canada each year.”
In 2016, Canada imported $557 million from the U.S. and exported $113 million, according statistics provided by Dairy Farmers of Ontario.
Adams added Canada’s dairy system is designed to avoid the crisis some American farmers are now facing with the sudden cancellation of dairy contracts.
“Canadian dairy practices are not to be blamed for the conditions U.S. processors and farmers are facing,” she said.
Wellington-Halton Hills MP and Conservative Party leadership hopeful Michael Chong said Canadian leaders need to defend supply management
“I think that President Trump is wrong,” Chong said. “The issue with America’s dairy farmers in Wisconsin is over-production and over-supply, not over Canada’s system of supply management.” He added, “We have to stand up for the sector because it is so vital to communities like Wellington County.”
Trump made further comments to journalists on April 20 from the Oval Office, hinting at changes to the North American Free Trade Agreement (NAFTA).
“Canada, what they’ve done to our dairy farm workers is a disgrace. It’s a disgrace,” said Trump.
“The fact is NAFTA, whether it’s Mexico or Canada, is a disaster for our country.”
Trump added the U.S. government would be “reporting back some time over the next two weeks” on what American officials plan to do about NAFTA.
“We can’t let Canada or anybody else take advantage and do what they did to our workers and to our farmers,” Trump concluded.
In an interview with Bloomberg, Prime Minister Justin Trudeau said Canada is not the challenge.
“The way we approach our very constructive relationship with the United States on trade and on other things is to base both around the facts of the issues and a shared desire to see citizens on both of our sides of the border succeed,” he said.
Opening up the NAFTA agreement concerns Harrop, who said the move would slow down the growth of the market.
“It’s an erosion of the dairy farmer’s market,” he said.
Chong said Canadian officials “should let the Trump administration make the first move. I think NAFTA has been a good agreement for both Canada and the United States.” He added, “I think what we need to do as Canadian leaders is present a united front, regardless of party, in defence of Canadian dairy farmers.”
On April 22, Ontario Premier Kathleen Wynne and Minister of Agriculture, Food and Rural Affairs Jeff Leal reacted to Trump’s comments.
“The supply-management system allows hard-working Ontario farmers and processors to consistently meet the demand for safe, high-quality products for Ontario and Canadian consumers,” Wynne and Leal stated in a joint press release.
“Our partnership with the United States is based on mutual respect and economic benefit.
“We will continue to closely monitor trade relations between Ontario and the United States and will stand up for the interests of Ontario farmers and processors every time.”
