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Federal funding helping Canadian dairy producers prepare for CETA
August 11, 2017

Klaas Vanderveen is glad that details released Aug. 1 for the $250 million federal Dairy Farm Investment Program include funds for projects retroactive to November 2016.

He began two months ago to install automated milkers at his dairy near Picture Butte, Alta. If his project qualifies for funding, the government could cover costs up to a maximum of $250,000.

As a director on both the Dairy Farmers of Canada and Alberta Milk boards, Vanderveen’s interest is not just personal, however. The funding is available over a five-year period to any cow milk operation in Canada that qualifies by undertaking projects to increase efficiency or productivity.

“This funding will help in that, and this will also help us compete with the heavily subsidized products that are coming in from Europe. It’s not seen as a subsidy. It’s a program that everybody has to qualify for in order to receive that funding,” said Vanderveen.

“The government gave up a growth area with the specialty cheeses (via CETA). We have to be able to manage that loss.”

Federal Agriculture Minister Lawrence MacAulay committed $350 million for the dairy industry last November to help it prepare for increased imports of European cheese as negotiated in the Comprehensive Economic and Trade Agreement.

Once in full force, CETA will allow Europe to export some 16,000 tonnes of specialty cheeses to Canada.

Last week MacAulay announced the details of the programs, which will see $250 million over five years earmarked for dairy farm investment and $100 million over four years for investments in the dairy processing sector.

Eligible dairy farm projects might include automated milkers and feeding systems, herd management investment and barn equipment. The processing funds could involve new equipment, infrastructure or processing lines that allow introduction of new cheese varieties.

“These two programs will assist Canada’s dairy producers and processors to prepare for CETA implementation within a strong supply management system,” MacAulay said in his announcement.

There are about 12,000 dairy farms in Canada. Mike Southwood, general manager of Alberta Milk, said sufficiency of those funds will depend on how many producers undertake projects that qualify.

“We’re fairly comfortable with the amount per farm, up to $250,000,” he said.

“That goes a long ways toward some of the bigger projects that producers take on, so I think on a farm basis it seems good.”

Farmers who apply for funds will have to meet certain criteria.

“I think you’ll have to demonstrate how competitiveness will change on your farm, or cost efficiencies … will happen on your farm, whether it’s reduced labour costs or increased cow productivity or something,” said Southwood.

“I think it will help farms do that. We’re hopeful that it will, for sure.

“Farms in the dairy industry in Canada have always been fairly active in trying to pursue increased competitiveness. You look at cow productivity, you look at feeding efficiencies, all those things are always trending upwards.”

Dairy Farmers of Manitoba chair David Wiens, who is also Dairy Farmers of Canada vice-chair, said the program appears to have a wide range of project eligibility.

“I believe that the program will be useful as a transition program.”

Wiens said smaller scale projects will have a cap of $60,000 in government funding, while larger ones will have the $250,000 limit.

Wiens said the increased import quota of European cheese will begin in September and amounts will be phased in over time to the agreed maximum.

The transition program was announced at the same time as new tariff rate quotas for 18 million kilograms of European cheeses.

Wiens said the DFC would have preferred greater allocation be given to Canadian cheese makers so they could import cheeses not already available in Canada. As it is, half the allocation went to distributors and retailers.

President Jacques Lefebvre had strong words about the allocation.

“It is clear that only the dairy sector is impacted negatively by this, yet the government has chosen to offer a significant portion of these licenses to retailers,” he said in a news release.

“It is incumbent on the government to explain its logic to the 80,000 Canadian families that depend on our sector for their livelihood. Any import license going to retailers equates to handing over the whole supply chain, from import, through distribution and retailing to the retailers. How is it in the best interest of Canadian consumers?”

 

Source: Western Producer


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