The Canadian House of Commons Standing Committee on Agriculture and Agri-Food held the hearing to study the issue of milk protein surpluses in the dairy industry.
Witnesses who testified included executives and senior management of the Dairy Farmers of Canada (DFC), Dairy Farmers of Ontario (DFO), Agropur, and Les Producteurs de lait du Québec (PLQ).
All four organizations agreed that the Canadian government needs to strengthen border controls and properly enforce existing regulations for dairy products in order to reduce domestic milk protein surpluses.
The DFC and DFO both testified that they see a lack of border controls, which are the federal government’s responsibility, as leading to overproduction and instability within the dairy supply management system.
“Effective border control is the foundation of a successful supply management system, of a strong domestic dairy industry, and that is the pillar in supply management that the federal government has the sole responsibility for. I'm suggesting it is time for an overhaul to ensure the government is fulfilling its end of the bargain. Leaky borders hurt the system,” DFO CEO Peter Gould said at the hearing.
The DFC also called for improvement in the auditing and validation processes, more transparency on tariff classifications processes, as well as “enforcement” of the existing rules.
Diafiltered milk loophole
One major point of discussion was the importation of diafiltered milk.
Diafiltered milk is produced when water is added to milk and then ultrafiltered, causing soluble materials such as milk sugars to be removed and non-soluble material such as milk fat to be retained. This results in a product that is more than 85% protein, making it exempt from any import restrictions when coming from the US.
Agropur stated that diafiltered milk was specifically created to circumvent Canadian border controls.
“These proteins are being used to replace Canadian skim milk in the making of cheese and yogurt, and there are no technical limitations on their use in the manufacturing process,” Dominique Benoit, senior vice president of Agropour, said.
Minister Lawrence MacAulay echoed this statement during the DFC annual meeting in early February.
He said, “We’re looking at an approach that ensures that the cheese compositional standards are clear for everyone. Under the standards, diafiltered milk was never meant to be allowed to be used as milk. We are working with the industry, and intend on having further discussions on this issue to ensure that standards are clear.”
Non-fat surplus debate
PLQ chairman Alain Bourbeau testified, “Any surpluses of non-fat solids are the responsibility of producers. There are responsibilities in the management of this system. The government is in charge of border management, and producers are responsible for production control. We bear the costs of any surpluses.”
He explained that dairy producers are losing money on the component sales because they are selling fewer kilograms of non-fat solids for every kilogram of butterfat sold.
The issue of diary imports has been brought to the federal government’s attention 60 times, according to Ruth Ellen Brosseau, from the Canadian New Democratic Party. The next course of action will be sending a written letter to the Minister of Agriculture with the points raised during the hearing.