Compensation for trade concessions for dairy, chicken, egg, turkey sectors
Agriculture and Agri-Food Canada has announced “full and fair compensation for the market access concessions made under the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).”
Canada’s supply-managed dairy, poultry and egg farmers are part of the backbone of the Canadian agriculture sector and the Canadian economy. They continue delivering the best quality products to the kitchen tables of Canadians, despite challenges presented by the COVID-19 pandemic. The strength of Canada’s supply management sector is essential to the vitality of our family farms and rural regions from across Canada.
In August 2019, AAFC Minister Bibeau announced that $1.75 billion would be provided to compensate Canadian dairy farmers over 8 years. Between December 2019 and January 2020, more than 10,000 dairy farmers received a cash payment of $345 million. Today, the Government has set a schedule to deliver the remaining $1.405 billion through direct payments to farmers over a timeline of only three years.
Dairy farmers will receive, on the basis of their milk quota, cash payments of $468 million in 2020-21, $469 million in 2021-22 and $468 million in 2022-23. The owner of a farm with 80 dairy cows will be awarded compensation in the form of a direct payment of approximately $38,000 each year. These amounts also build on the $250 million CETA on-farm investment program, and provide certainty on the schedule and form of remaining payments in the $2 billion total compensation package for dairy farmers.
The Government is also announcing $691 million for 10-year programs for Canada’s 4,800 chicken, egg, broiler hatching egg, and turkey farmers. Responding to sector demands, these programs will drive innovation and growth for farmers. Program details will be designed in consultation with sector representatives and launched as soon as possible.
Furthermore, the Government of Canada remains committed to engaging the sector on full and fair compensation for the Canada-United States-Mexico Agreement (CUSMA), and to processors of supply managed products.
“Our Government is fully behind our supply management sector, which supports our family farms and the vitality of our rural areas. Today’s announcement of a substantial compensation package for our dairy, poultry and egg farmers shows our support for a strong supply management sector for many generations to come.” – The Honourable Marie-Claude Bibeau, Minister of Agriculture and Agri Food
“The level of certainty provided by this announcement enables us to be in a better position in terms of innovations and efficiencies to better compete with increase imports of dairy products made from foreign milk.” – Pierre Lampron, President, Dairy Farmers of Canada
“Canada’s 2,877 chicken farmers appreciate the announcement today on mitigation measures stemming from the CPTPP. Farmers have waited a long time to see action on this file, and we believe that this is a step in the right direction. We look forward to continuing our work on the investment and market development programs for our sector.” – Benoît Fontaine, Chair, Chicken Farmers of Canada
“Hatching egg producers have suffered significant losses due to recent trade agreements and we are pleased that the federal government finally recognizes the significant challenges posed to our farmers by CPTPP. We will continue to work closely with the federal government to develop policies that mitigate the impacts of the CPTPP and CUSMA” – Brian Bilkes, Chair, Canadian Hatching Egg Producers
“Turkey Farmers of Canada appreciates the announcement of mitigation funding required as a result of the CPTPP agreement. The access granted to our domestic market poses significant losses to Canadian turkey farmers. This funding will be used towards market development programs and for farmers to reinvest in their operations. We remain committed to continued work with the government and continued progress on this file.” – Darren Ference, Chair, Turkey Farmers of Canada
“With today’s announcement, the government has taken a positive step in supporting Canada’s egg farmers. This investment in our sector will provide new opportunities for our farmers to reinvest in their operations and plan for the future as they navigate the market losses as a result of the CPTPP agreement. We appreciate the government’s continued and vocal support for supply management, and look forward to the continuation of this commitment moving forward.” – Roger Pelissero, Chair of Egg Farmers of Canada
• The Government of Canada has maintained the three pillars of Canada’s supply management system for dairy, poultry and eggs — production control, pricing mechanisms, and import control.
• During negotiations for the Canada-United States-Mexico Agreement (CUSMA), the Government defended supply management from American efforts to dismantle it. In the recently concluded agreement with the U.K., the Government defended Canada’s supply management system, and will continue to do so in future discussions with the U.K. The Government has been clear that there will be no more concessions on supply management in future trade negotiations.
• In 2019, there were 10,371 dairy farms in Canada, supporting close to 19,000 direct jobs on farms.
• There are over 4,000 producers of chicken, broiler hatching eggs, turkey, and eggs in Canada. The four supply managed poultry and egg sectors (chicken, broiler hatching eggs, turkey, and eggs) generated over $4.9 billion in farm cash receipts in 2019, 7.4 percent of all farm cash receipts in Canada. According to industry, Canada’s poultry and egg sector supports more than 140,000 direct and indirect jobs.
• Because of the downturn of the restaurant and food service industry during the COVID-19 pandemic, the Government of Canada helped dairy farmers deal with the resulting surpluses of products like cream, by increasing the borrowing capacity of the Canadian Dairy Commission by $200 million. This gives the Commission added capacity to purchase excess perishable products like cream and convert them into longer lived ones like cheese in order support producers and reduce food waste during market disruptions.
• Once fully phased-in, concessions made under three trade deals (the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the CUSMA), as well as World Trade Organization commitments, are estimated to be equivalent to approximately 10 percent of Canada’s current milk production.
• The demand for Canadian dairy remains strong, and has grown by almost six percent over the past 10 years.