The United States government is sending $100 million to dairy farmers, the final instalment on a $350-million package to help them deal with the COVID-19 pandemic.
The payment is for fluid milk and is to make up deficits in market prices and revenues due to the pandemic.
So what about this?
The Canadian solution is supply management. It shifts the cost of supporting dairy farmers from federal and provincial governments to consumers.
But that also means the poorest families in the nation are paying as much as the wealthiest in dairy-industry supports.
The Uruguay round of global trade negotiations aimed to restrain subsidies, doing collectively what politicians were too timid to tackle individually.
There was an agreement to convert all subsidies and trade barriers into tariffs and the intention was to then phase down those subsidies during subsequent negotiations.
Canada disappointed trade partners by setting its dairy and poultry tariffs quite high, but they lived with it and focused their efforts on bilateral or regional trade negotiations to get some access to Canadian markets around those high tariffs.
I think it’s time to go back to the original intention to have everybody reduce their subsidies and trade barriers. Not bilateral, not regional, but global.
Instead of simply trying to retain dairy tariffs, Canada should set a target for cutting farm subsidies in return for however much our dairy tariffs could come down.
That would help putting Canadian farmers on a more competitive footing.
And if there is truly a level playing field, I think Canadian dairy and poultry farmers are good enough to capture a significant slice of the U.S. markets, particularly for fluid milk and poultry marketed in nearby cities such as Seattle, Chicago, Detroit and Buffalo.
