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Ottawa extends 333 million to help deal with surpluses in the dairy industry

Valérian Mazataud Archives Le Devoir A worker at the Au gré des champs cheese factory, in Saint- Jean-sur-Richelieu, fills a vat with milk.

Ottawa is coming to the rescue of processors and dairy producers who are struggling with what remains of milk when the fat has been extracted, particularly to make butter or cream.

These residues , which we call non-fat milk solids (NGS), are rich in proteins and minerals, but must be transformed to have a second life with consumers.

However, there are more and more of these solids due to changes in consumer habits.

“The primary cause [of the growth of SNG surpluses] is the consumption of types of dairy products which have seen growth in recent years, for example cream and butter,” explained the president and head of the management of the Canadian Dairy Processors Association, Mathieu Frigon, at a press conference Friday at the Agriculture Canada Research and Development Center in Saint-Hyacinthe.

He added that recent trade agreements, including the one with the United States and Mexico and the one with Europe, “have created a lot of uncertainty on the business side to invest in processing this skimmed milk.”

$333 million over ten years


Hence the announcement by the federal Minister of Agriculture, Lawrence MacAuley, to offer processors an envelope of 333 million dollars over ten years to support the modernization, expansion or even construction of new facilities and other types of investments that will process a greater share of SNG.

“To date, we have not found a way to tell a cow not to produce!” joked the parliamentary secretary to the Minister of Agriculture, Francis Drouin, who participated in the announcement alongside the minister.

With an increase in transformer production, “there are derivative products that will be able to be made, I expect the sector to innovate in these new products, and what is good for the transformer will be good for the dairy producer at the end of the line. At the moment, the only market that dairy producers often have is for food intended for animals,” added Mr. Drouin.

“We will not no more concessions”

Ottawa had promised, by concluding trade agreements which opened a breach in the protected markets for production under supply management, to compensate producers and processors. And even if it is consumer choices that are the primary cause of the growth of surpluses, the opening of markets had slowed down investment, argued Mr. Frigon.

Francis Drouin said clearly recognized by stating that this envelope “concludes all the support promised to producers and processors following the market losses of recent trade agreements”.

In the same breath, Mr. Drouin repeated the comments made in English a few moments earlier by his minister: “The Government of Canada will continue to safeguard, protect and defend supply management. We will no longer make trade concessions in supply-managed sectors.”

These words were certainly music to the ears of Daniel Gobeil, vice-president of the Dairy Farmers of Canada and president of the Producers milk from Quebec. “Thank you, Mr. MacAuley for your support of supply management. I am very happy to hear your commitment to supply management,” he declared.

Even if the aid will not be paid directly to dairy producers, they will see a strengthening of the supply chain and better outlets for their SNG residues.

Source of dispute


The issue of trade and free trade agreements has often been a source of dispute between Ottawa and producers of milk, poultry and eggs, all products protected by the management system of the offer.

The various federal governments have always promised to protect them during free trade negotiations, but international partners have often succeeded in forcing Canada to bend its back and accept breaches in this protection.

En return, Ottawa had to commit to paying compensation and aid to producers and processors, aid of which Friday's envelope represents the last part in the dairy sector.

There is no there is no doubt that the sector will be ready to do its part in modernizing and increasing SNG processing: the aid announced on Friday will only cover 25% to 33% of the investments made by processors. In other words, the private sector will assume between two-thirds and three-quarters of the required investments.

Quebec will receive $109 million of the $333 million envelope over ten years. Ontario will receive 127 million, while 74 million and 18 million are intended, respectively, for the Western provinces and the Atlantic provinces.

Teilor Stone

By Teilor Stone

Teilor Stone has been a reporter on the news desk since 2013. Before that she wrote about young adolescence and family dynamics for Styles and was the legal affairs correspondent for the Metro desk. Before joining Thesaxon , Teilor Stone worked as a staff writer at the Village Voice and a freelancer for Newsday, The Wall Street Journal, GQ and Mirabella. To get in touch, contact me through my teilor@nizhtimes.com 1-800-268-7116