Canada’s dairy industry will receive $350 million in funding
By Diego Flammini
Assistant Editor, North American Content
Farms.com
Canadian dairy producers now have a better understanding of how two federal programs will help them as more European cheeses are set to appear on Canadian store shelves.
About 17,000 tonnes of foreign cheese will enter the Canadian market over five years, beginning on September 21, thanks to the Canada-European Union Comprehensive Agreement (CETA). The Dairy Farmers of Canada estimated in 2016 that this influx of European products could cost Canadian producers $116 million annually.
To help producers transition to this increased competition, the Canadian Government announced two programs in November 2016 – the five-year $250 million Dairy Farm Investment Program and the four-year $100 million Dairy Processing Investment Fund.
And the Government released more details on the programs yesterday.
"These two programs will assist Canada's dairy producers and processors to prepare for CETA implementation, within a strong supply management system,” Lawrence MacAulay, Federal Minister of Agriculture, said in yesterday’s release.
“The Government of Canada is proud to support a robust dairy industry that contributes to meeting growing demand for high-quality, sustainable food, while strengthening the middle class."
How do the programs work?
The Dairy Farm Investment Program provides $250,000 per licensed dairy farm to help producers upgrade barn technology and equipment, including robotic milkers and feeding systems.
Applicants can apply more than once and for more than one project, but their total funding will not exceed $250,000. The minimum amount of funding is $1,000.
And the Dairy Processing Investment Fund provides up to $10 million for each capital investment project for processors, like the instillation of new equipment. The program can also provide up to $250,000 for each project to enable processors to access necessary and relevant expertise.
Government announces TRQ allocation
The Government is also taking measures to ensure Canadian businesses can remain competitive once CETA is implemented.
François-Philippe Champagne, Canada’s Minister of International Trade, announced new tariff rate quotas (TRQ) for European cheese imports on August 1.
And Canadian companies that didn’t have permits to import cheese can apply for shares of the CETA import quotas.
The quotas break down as follows:
- Small and medium-sized cheese manufacturers, distributors, and retailers will receive a total of 60 per cent of the quota, and
- Large manufacturers, distributors and retailers will receive 40 per cent of the quota.
With respect to the distribution of quotas between the manufacturers and the distributors and retailers, the split will be 50/50, according to Global Affairs Canada.
Dairy groups unhappy with quota allocation
Dairy Farmers of Canada (DFC) and the Dairy Processors Association of Canada are unhappy with the quota allocation.
Canadian cheesemakers should have the lion’s share of the quotas, especially since most of the European cheese is coming into Canada tariff-free, the groups say.
“Any import license going to retailers equates to handing over the whole supply chain, from import, through distribution and retailing to the retailers,” Jacques Lefebvre, president and CEO of the Dairy Processors Association of Canada, said in yesterday’s joint statement with DFC.