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Election 2015

Farmers Could Sour on Tories over TPP Dairy Battle

Ron Versteeg waits to hear how major trade deal will impact his industry.

Jeremy Nuttall 1 Aug 2015TheTyee.ca

Jeremy J. Nuttall is The Tyee's Parliament Hill reporter in Ottawa. Find his previous stories here.

His coverage of Canadian national issues is made possible because of generous financial support from our Tyee Builders. Please consider joining.

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Ron Versteeg with his polite cows. Photo by Jeremy Nuttall.

The cows on Ron Versteeg's dairy farm seem conspicuously silent, at least to an outsider.

Under the rafters of a barn 30 minutes southeast of Ottawa, the black-and-white milk machines chew feed, swat flies with their tails, and take turns getting a thorough scratching from the automatic brushes.

But not a single moo echoes through the structure.

"We like to keep them quiet," Versteeg said with a chuckle, explaining dairy cows don't make much noise unless unhappy or hungry -- the former often related to the latter.

If there's anyone fit to judge the mood of a cow it's Versteeg, a former Dairy Farmers of Canada vice-president who inherited the farm from his father in 1983.

Born into a family of farmers himself, Versteeg Sr. started the spread in 1964 after immigrating from the Netherlands.

Like many dairy farms, it's a business handed down through a generation in an industry that has nourished the country for decades.

The cows may be content, but at the moment the mood of the thousands of dairy farmers like Versteeg across Canada is much different.

Right now, they're waiting to hear if they will be sold out by their government during the Trans-Pacific Partnership trade negotiations.

The TPP is a free trade agreement between 12 different Pacific nations accounting for 40 per cent of the world's economy.

While the nations failed to reach an agreement by the weekend, the TPP, which has been kept from the public eye, is still under negotiation.

Depending on the final outcome, it's a deal that experts say could weigh a lot on the Conservatives come election day.

Farms at risk?

According to Globe and Mail sources, the deal was stalled last week over Canada's reluctance to open its sheltered dairy market to foreign imports, among other points.

In an interview earlier this week with Bloomberg News, Prime Minister Stephen Harper said his government is trying to protect the supply management system.

"The government is at the table, making sure it protects the interests as best we can of every Canadian industry," he said. "We have made commitments to sustain our supply management systems, and we are working to achieve that."

Supply management in the dairy industry involves import restrictions, government-set prices and predetermined levels of production.

It keeps supply and prices steady, which in turn avoids massive surpluses of milk that tank the price.

In the U.S. and Europe, where supply management isn't used, such surpluses have led to government subsidies to help farmers when the price drops.

According to the Dairy Farmers of Canada, those subsidies can go as high as $55 billion euros a year in Europe, while the U.S. shells out $4 billion.

Now, TPP partners wanting to bring surplus milk to new markets are looking to Canada.

Dairy farmers depend on growth like any other industry to sustain themselves and feed the country, but it doesn't end there, Versteeg said.

"Let's face it: agriculture isn't just about feeding people, it's about employing people as well," he said.

If the supply management system is hit hard by the TPP deal, up to 25,000 direct jobs in the dairy industry and even more indirect jobs could be affected, he said.

"If the whole system is dismantled, probably half of the farms in Canada would disappear," he said. "That's the worst case scenario."

While it's unlikely that would happen, the TPP is not the first trade deal to threaten the country's supply management system.

The 1994 World Trade Organization agreement and the Comprehensive Economic Trade Agreement completed with Europe last year both resulted in concessions.

The CETA deal will allow Europe to nearly double its exports of cheese to Canada, raising its share of the market to nearly 10 per cent.

The TPP, Versteeg said, offers no upside for the country's dairy farmers, because there's no chance Canada will export to countries that already make surplus dairy themselves.

The raging cow

If Canada makes significant concessions in the TPP, the Conservatives could feel the wrath of farmers in dairy country, said a political science professor from the University of Toronto.

Grace Skogstad said Harper's party is already faring poorly in Quebec, and risks losing farmers in the battleground provinces of B.C. and Ontario. Eighty per cent of Canada's dairy farms are located in Quebec and Ontario.

The loss of a few seats in rural Canada wouldn't have mattered much to an incumbent government in past elections, but this year is different, Skogstad said.

"If the polls are to be believed, the best the Conservatives can get now is a minority," she said. "So these seats could matter. They could matter quite a bit."

NDP leader Tom Mulcair toured dairy country in Quebec last week, and stopped by a farm in Ontario to feed a calf the week before.

During his tours, he defended the supply management system and promised more support to farmers.

While all parties defend supply management, Skogstad noted the Conservatives are the only ones in the position of having to deal with the issue.

And if they end up signing away more import restrictions on dairy, they'll have to compensate farmers if they want to retain political support, she said.

The Dairy Farmers of Canada warned it could be more than just farmers who sour on the Conservatives if import restrictions are lifted.

A recent poll by the organization said 70 per cent of 1,360 people agreed it was important for Canada to protect its dairy industry, with a further 89 per cent agreeing it was important for their milk products to come from Canada.

Back among his comfortable cows, Versteeg said any damage done to the Conservatives by farmers would be influenced by how quickly the government phases in supply management concessions, should they be made.

He said the view in the west is that farmers vote Conservative no matter what. But he said in eastern dairy country, that isn't necessarily the case.

"Dairy farmers don't vote as a block, so it's hard to predict," he said. "It depends on what the level of injury is for every individual farmer, and they're going to assess that differently."

Some may be able to cope with major changes, while for others it may mean the end of their farms, Versteeg said.

But for now, all the farmers can do is keep the cows quiet and wait.  [Tyee]

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