Canada dairy farmers content as TPP deal keeps system intact

Mon Oct 5, 2015 2:20pm EDT
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By Rod Nickel

WINNIPEG, Manitoba (Reuters) - Canadian dairy farmers are breathing easier after 12 countries struck a Trans-Pacific Partnership deal on Monday that keeps their protectionist system intact and the government offered billions in compensation for new imports.

Canada will allow TPP countries over five years to provide 3.25 percent annually of its dairy supply, and about 2 percent of eggs, chicken and turkey. That's a far cry from earlier demands by the United States, Australia and New Zealand for Canada to phase out its system of supply, price and import controls.

"It's a relief for producers right across the country that there's no negative impact," said Wally Smith, president of Dairy Farmers of Canada, the main dairy lobby group, in an interview. "Farmers have been contacting me saying this is good news because they can get on with their life."

The Conservative government, facing election Oct. 19, promised C$4.3 billion ($3.28 billion) in compensation to supply-managed farmers over 15 years. Prime Minister Stephen Harper said the package would not buy production quotas from farmers to reduce domestic supplies.

A typical dairy farm will collect about C$166,000.

Even so, there are key differences between production methods in Canada and the United States.

U.S. farms can inject the hormone recombinant bovine somatotropin (rBST) into cattle to increase milk production, but it is banned for use in Canada. There is no restriction, however, on import or sale of milk from cows treated with rBST, according to the Canadian government.

If consumers are concerned, they should buy visibly marked Canadian products, Smith said.   Continued...

Dairy farmers walk with their cows during a protest against the Trans-Pacific Partnership (TPP) trade agreement in front of Parliament Hill in Ottawa, Canada September 29, 2015. REUTERS/Chris Wattie