WASHINGTON — Editor’s note: The following commentary was submitted by Chris Holman, Owner-Operator of Nami Moon Farms and Lifetime Member of the Wisconsin Farmers Union.
By now, Canada must have come to regret its move to bring ultra-filtered milk out from the regulatory shadows earlier this year and to create a new, special price class for it at home. In doing so, Canada inadvertently provided leaders in the U.S. dairy sector with a trumped up political drama that now has the National Milk Producers Federation (NMPF) telling the world that, “The only way we believe we can address that issue [creating a new class of milk] is the complete elimination of the supply management system, the complete elimination of all tariffs and the complete free flow of dairy products among the United States, Mexico and Canada.” At least, that’s what NMPF’s Jaime Castaneda told The Canadian Press prior to his recent arrival in Ottawa for the much-ballyhooed “Round Three” of talks centered on the renegotiation of the North American Free Trade Agreement (NAFTA). Curiously, Castaneda went on to explain that NMPF would be working with Mexico to achieve, “nothing short of the full-scale destruction of [Canada’s] supply management.”
For some reason, Canada has become the milk-white whale for the most powerful people in U.S. dairy, and though the Canadians might not realize it yet, their interests in maintaining a healthy marketplace for their farmers has leaders on this side of the border insinuating that this is a big part of what’s ailing American dairy farmers. Of course, the Canadians won’t get credit for helping to convince the U.S. Food and Drug Administration (FDA) to change its mind on how U.S. processors can use ultra- filtered milk in their dairy products. Ultra-filtered milk is the very product that was at the heart of the dairy dispute and surprise dropping of dairy farms earlier this year. You may remember that Grassland dropped dozens of Wisconsin dairy farmers with just 30 days notice pointing its finger northward at Canada. One might also think that this policy shift from the FDA would bail Canada out a bit since it was apparently their action that pushed the FDA to do something that dairy leaders in the states have coveted for decades. Sadly that is not the case, as industry leaders like the NMPF would rather take Canada on and try to undermine its market—a curious tactic riddled with double standards—than to tackle the thorny issues of overproduction in the U.S. dairy sector and farm economy in general.
We know that Canada is one of our biggest and best trade partners, but importing $631.6 million worth of American dairy products isn’t satisfactory enough for American dairy leaders and despite the fact that America imports just a tiny fraction of that amount in return. Just this week, US negotiators left reason in their wake and demanded ten times the access to Canadian markets than what was agreed to under the now-abandoned Trans-Pacific Partnership (TPP.) Industry leaders also seem to think that Canada concerning itself mostly with domestic dairy consumption is an out-dated and inefficient approach. Unfortunately, the scapegoating that this “Blame Canada” crowd began earlier in the year will continue, and given the hostility of their rhetoric it looks to continue until Canadian trade representatives cave to our demands and abandon their dairy farmers and their cows to our wolves.
This unhealthy obsession with destroying Canada’s supply management system is being motivated by the concern that it provides a working model that meets domestic needs while allowing some dovetailing with the international trade. It provides a precedent for a dairy industry and government showing concern for its farmers and not just their production, and for some reason that is unacceptable to industry leaders here in the US. Maybe it’s because Canada is giving something for American dairy farmers to look at and ask, “Why can’t we have something like that?”
It’s worth noting that American agriculture is somewhat hypocritical when it comes to the notion of managing the supply of a commodity. Farmers who grow sugar beets in the U.S. have a form of supply management that seems to work for them, and sugar not only tends to pay well but has also become one of the strongest lobbies in D.C. According to the USDA, “The U.S. sugar program uses price supports, domestic marketing allotments, and tariff-rate quotas (TRQs) to influence the amount of sugar available to the U.S. market. The program supports U.S. sugar prices above comparable levels in the world market.” Even here in America’s Dairyland— the great state of Wisconsin—cranberry farmers are drowning in their bogs of overproduction and many are now clamoring for their own supply management. Why would they do that if NMPF is right and supply management schemes must be completely eliminated?
When supply management is brought up in dairy circles, it’s often argued that if American dairy farmers were to adopt that system, someone else would produce what they don’t, and they’d have just put themselves at a market disadvantage. The sad and frustratingly ugly part about that is that it wouldn’t be Canada, but other American dairy farmers who would be the most likely culprit to sink their fellow dairy farmers given the full-throttle mentality that has infected American agriculture.
Despite the constant barrage of attacks against Canada and declarations of trade war like those that NMPF has recently fired into the middle of the Canadian dairy industry, we are also seeing an ironic attempt at supply management being carried out by U.S. processors—both cooperative and non-cooperative alike—who are implementing base plans that disincentivize production for their farmers. That’s great for them, but it still does nothing for farmers and that’s the point.
The leadership in the U.S. dairy sector, led by the NMPF, isn’t concerned with the plight of all of their farmers. They are concerned with taking the easy way out, blaming Canada, and increasing domestic production because they all—checkoffs included—make more money from every additional hundredweight of milk produced. Taking out Canadian dairy will, they hope, provide even more room for American production to pad their paychecks. That’s what they’re ultimately concerned with, and getting paid a fair price is proving to be just another thing that our leaders feel they are worthy of but American and Canadian dairy farmers are not.
—Chris Holman
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