August 30, 2018 7:48 am
Updated: August 30, 2018 8:56 pm

Opening Canadian market to U.S. won’t solve problems for American farmers: Dairy Farmers of Ontario

WATCH: A Friday deadline set by U.S. President Donald Trump to strike a deal with Canada is fast approaching, but there are still some political hurdles to overcome at the discussion table. One of those is a bi-national dispute resolution mechanism. David Akin runs us through the last standing issues at the heart of the NAFTA debate.

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A prominent issue amid NAFTA talks is raising concerns among dairy farmers in Ontario.

Prime Minister Justin Trudeau says it is obvious the Trump administration is intent on dismantling Canada’s supply management system, something dairy farmers say is vital to the country’s protected dairy sector.

READ MORE: Saskatchewan dairy farmers caught in the middle of turbulent NAFTA talks


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“It’s a system whereby the amount of the milk requirement that the country needs is allocated to the provinces,” said Graham Lloyd, CEO for the Dairy Farmers of Ontario. “The province then allocates it to the farmers for production purposes.

“That way the supply that comes off the farms is to meet the requirements that processors need.”

Essentially, supply management ensures farmers are only producing as much product as the Canadian market demands. It sets production quotas and prices for domestic dairy products while imposing steep tariffs on imports. Farmers can sell their milk for a set price, while retailers pick their own price tag. In theory, it provides stability for the market, food costs and farmers alike.

In the United States and many European countries, farmers receive subsidies from the federal government instead.

READ MORE: Dairy prices could drop if Canada loosened supply management terms: experts

How much foreign milk Canada allows in appears to be a sticking point in NAFTA talks for U.S. President Donald Trump, but according to Lloyd it’s the lack of a proper system in the United States that’s causing problems for American dairy farmers.

“You take New York, Wisconsin and Michigan — they overproduce or have excess milk on a daily basis equal to all of the milk produced in Ontario,” he said.

“That’s why, with respect to NAFTA, opening up the Canadian market would be meaningless to what the Americans need.”

“They need to actually put better restrictions and controls on how they are producing their milk,” said Lloyd.

Lloyd said the U.S. should forget about gaining access to the northern market and instead focus on more production controls stateside.

“Dairy Farmers of America have identified that what’s causing their bankrupt farms is that there is too much competition and no controls. So they’re all driving to the bottom as opposed to trying to protect one another,” he said.

WATCH: Why did Trump turn Canada’s small dairy industry into big target?

Speaking Wednesday in Kapuskasing, Prime Minister Justin Trudeau doubled down on his commitment to the practice.

“No NAFTA deal is better than a bad NAFTA deal,” Trudeau declared. “Our government, and I personally, will stand up to defend supply management and defend our dairy farmers. That’s something we’ve made very clear to the Americans even though it has been very obvious the Americans want us to get rid of supply management. That is not acceptable to us.”

A U.S.-imposed deadline has given Canada until Friday to get on board with a new deal between Mexico and the United States.

Since NAFTA talks resumed, both Canada and the U.S. have expressed optimism an agreement will be reached.

— With files from Cami Kepke

© 2018 Global News, a division of Corus Entertainment Inc.

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