Dairy farmers will once again pay the price to finalize a trade agreement.
The new NAFTA deal known as United States-Mexico-Canada Agreement will provide US dairy farmers access to about 3.5 per cent of Canada’s approximately $16-billion annual domestic dairy market.
The dairy industry paid the price when other countries were granted access to Canada’s dairy market when Comprehensive Economic and Trade Agreement and Comprehensive and Progressive Agreement for Trans-Pacific Partnership were signed.
The dairy industry in Canada lost about a quarter of a billion dollars annually in dairy production to other countries from the signing of those two agreements according to Dairy Farmers of Canada.
Mike Vanden Dool, owner and operator of Vanden Dool Farms Ltd located near Picture Butte, is very disappointed with the new agreement with how much dairy farmers in Canada are losing.
“We are losing 3.56 per cent of our market shares. We also lost the ability to ship so much skim powder.”
Vanden Dool milks 330 cows and believes the dairy industry in Alberta will slowly decrease.
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“It’s going to mean a lot less cows and it’s going to take our future growth away. With CETA, we lost quota and with this new agreement, we are going to lose more quota.”
However, he believes the quota system will still exist but is slowly eroding away to other countries.
According to Alberta Milk, quota is used to hold dairy farmers accountable for how much milk they need to produce in a month and if they exceed it, the farmer won’t get paid for the extra milk produced.
Pierre Lampron, President of Dairy Farmers of Canada, isn’t too happy with how the government says it values the dairy sector but then sacrifices it to make an agreement.
“The government has said repeatedly that it values a strong and vibrant dairy sector – they have once again put that in jeopardy by giving away more concessions.”
Lampron also believes the dairy sector is used as a bargaining chip for United States President Donald Trump
“Today, the message sent to our passionate, proud and quality-conscious farmers and all the people who work in the dairy sector is clear, they are nothing more than a bargaining chip to satisfy President Trump.”
According to Dairy Farmers of Canada, the dairy sector supplies about 220,000 jobs nationwide and sells approximately eight billion litres of milk to dairy manufacturers each year.
On the other hand, Mayor Chris Spearman, believes Lethbridge will be impacted also by what the USMCA could do to interest rates.
“It’s likely the US will control inflation rates by increasing interest rates. In Canada, we don’t want interest rates to rise but they probably will rise. This will put a damper on people’s abilities to buy homes. It’s going to restrict mortgage qualifications.
Spearman adds that in Lethbridge homebuilding is a strong industry and house prices are relatively low.
If the interest rates do rise, it will limit people’s abilities to buy homes and have a negative effect on the homebuilding industry explains the mayor.
The new agreement also allows USA access to Canada’s chicken, turkey, broiler hatching eggs and chicks industry.
According to Vanden Dool, dairy farmers are still waiting to hear back from the government if there is a compensation package involved in this deal.
