Tuesday, February 17, 2015

Cheese importers lobby for permits

There is intense lobbying underway in Ottawa to gain cheese import permits that will be issued as part of the free trade deal reached last year between Canada and the European Union.

The permits are a licence to print money because the European cheeses can be bought at low world prices, enter Canada at relatively low tariffs and be sold in Canada at relatively high prices because the dairy industry is protected by some of Canada’s highest tariffs.

Those tariffs exist to protect the market for Canadian dairy farmers who practice supply management so they don’t produce so much milk that prices will decline.

According to a story carried today by Canadian Press, Saputo Inc. of Montreal wants the import permits.

It says only large companies are diversified enough to use the imports responsibly. It is joined in that lobby by Agropur and Parmalat, the three largest dairy processing companies in Canada.

Ironically, Saputo argues that if others gain the import permits, they could drive prices lower and that would threaten the survival of Canada’s small, artinsenal cheese processors.

The big players want import permits to be handed out to those who already hold import permits, and on the same market-share basis.

The dairy farmers, through a company they formed, want the federal government to grant them the import permits.

They would presumably use control of the permits to maintain the most favourable market environment for dairy farmers.

It would be nice if the Harper government would implement a fully transparent process for doling out these import permits, but that would be totally out of character.