Al Mussel of Agri-Food Economic Systems explored Canadian
and United States dairy policies in his most recent analysis and concludes that
they are remarkably similar.
At the urging of U.S. dairy farmers, U.S. President Trump
has put a high priority on gaining greater access to the Canadian dairy market.
Mussel said Canadian dairy farmers have been on the defensive
in trade negotiations, but could throw rocks of their own at the U.S. dairy policies.
One of the U.S. complaints is about how Canada administers
tariff-rate quotas – i.e. a permit system allowing limited volumes of imports
are reduced tariff rates. Canada recently reached a deal with New Zealand over
the same issue.
Mussel wrote that “import licenses in the U.S. are allocated
based on
imports of record, effectively on a use-it-or-lose-it
basis.
“ Canada allocates its import permits based on
output/sales, also with a use-it-or-lose-it provision.
In both the US and Canada, provisions exist toil
are uncann
Canada uses supply management to improve milk prices for farmers,
basically charging more for milk that’s sold as drink and less for milk used to
make dairy products and the U.S. also has policies that result in higher prices
for fluid (i.e. drinking) milk.
Mussel's analysis raises hope that dairy policy will not be the roadblock to a trade deal with Trump and that the outcome for dairy farmers will be similar to the recent deal with New Zealand.