Sunday, November 20, 2016

New York, Canada Continue Dairy Talks

From Empire Farm & Dairy magazine



ALBANY — A confrontation over Canadian efforts to restrict New York-originated dairy products from a vital market remains at the forefront of dairy industry concerns and discussions between governments.

Dairy industry officials said Nov. 1 they are hopeful after the latest round of support from the state government will strengthen their position, but no resolution has been raised that would quell fears that a significant portion of the market is threatened.

Industry interest in Canadian policies has been heightened by the enactment of provincial regulations earlier this year which favored Ontario producers over their New York counterparts in supplying ultra-filtered milk.

The product, a protein-rich skim milk variety, is primarily used in cheese and yogurt production, and had enjoyed a duty-free status, but now faces increased costs to benefit Ontario dairies.

The proposed National Ingredient Strategy would expand the import limitations across Canada, despite claims that it violates existing trade agreements like NAFTA.

“At a time when low milk prices are threatening the viability of some family farms, any step by Canadian leaders to unfairly restrict the flow of milk into the Ontario province and beyond will have detrimental impacts on farmers and the overall farm economy,” said Dean Norton of Elba, the New York Farm Bureau’s president.

Industry officials pegged Canadian protectionism as risking an end market for more than 180 millions of pounds of milk. That’s roughly 20 percent of sales, O-AT-KA Milk Products Board Chairman John Gould said.

“Canada continually attempts to erect trade barriers where there should be none,” Gould said, noting his business reflects the “efforts, investment and hopes” of hundreds of dairy farmers and workers at the Batavia milk plant.

More than half of the state’s agricultural imports come from dairy products and components, with Canada the largest trading partner. But trade cooperation goes beyond milk, and far beyond agriculture. 

State Agriculture and Markets Commissioner Richard A. Ball said that message was firmly made at meetings marking the 25th anniversary of Tri-National Agricultural Accord, held in Niagara Falls, Ontario.

“It was very much implied that trade is about doing business with one another, that the goal of the Accord is to do more trade, not less. Free and open trade, and to try to stop countries from protecting unfairly a sector,” Ball said. “The tri-lateral accord can deal with trade irritants, but we made the case that for New York and the United States, this is something that rises above the level of an irritant.”

Ball said support for the state’s position was echoed by other dairy-heavy states like Wisconsin and Vermont, those without a strong dairy connection, and even the Mexican representatives — who are concerned that subsidized Canadian milk could flood their production markets.

“We’ve stood our ground ... very seriously and in a decent way, and they heard the message,” Ball said.

NYFB spokesman Steve Ammerman said the national American Farm Bureau Federation, headed by President Zippy Duvall, has also met with Canadian representatives.

“The word our president received is that this is a provincial, but not a national issue, but there was no promise it won’t spread to other provinces,” said Ammerman, who noted the importance to keep applying pressure on the Canadians. “Talks are going on at every level ... we’re hopeful they will reverse course, but that hasn’t happened at this point.”

New York will explore all options available to ensure the dairy industry has fair access to the Canadian export market, Gov. Andrew Cuomo said in announcing his opposition to the proposed regulations. In a letter to Prime Minister of Canada Justin Trudeau, Cuomo urged the Canadian government to develop a mutually beneficial national agreement.

While intentions are in concert, the industry is uncertain about the result. A conclusion to the issue is difficult to speculate, O-AT-KA Milk Products CEO Bill Schreiber said, as there’s been no clear change in Canadian mindsets and no announced changes to the programs under consideration.

“What I can say with certainty is that members of the dairy industry, organizations representing the dairy industry and members of government at every level have gotten behind this effort, to get Canada to play by the rules,” Schreiber said. “We’re hopeful, and grateful for their support.”

The impact of the negotiations will weigh on the industry’s support for other trade deals.

“I question if we, as a New York cooperative, should give our support to the passage of the Trans-Pacific Partnership if we cannot trust the Canadian government to comply with its past agreements,” said Upstate Niagara Cooperative CEO Larry Webster, who added that Trudeau’s response “should answer that question.”

Speaking with the Canadian representatives, Ball said he pointed to the support the dairy industry had offered in the past. When the U.S. lost a World Trade Organization ruling over County of Origin Labeling, it was dairy farmers that went to Washington to find a solution. They are the same farmers the latest issue will harm the most.

“We need to work together, not against each other,” Ball said.

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