Agropur says Canada's dairy supply management system working despite NAFTA negotiation pressure from US
Agropur said since its inception, Canada's supply management system has evolved into a modern system that still provides stability for farmers without the need for subsidies, a balanced market for processors, support for Canada's rural economy, and a vast selection of quality products at fair prices for consumers.
Impact of eliminating supply management
In a statement, the company argued that no one in Canada would gain from the elimination of the system. That conclusion, it said, is supported by the results of a study commissioned by Agropur in 2015.
The Boston Consulting Group study stated ending supply management would lead to a C$2-3.5bn (US$1.6-2.8bn) decrease in Canada's GDP; the survival of 40-50% of farms would be jeopardized; and 24,000 jobs would be threatened, many of them in outlying areas where they would be hard to replace.
The report added about 40% of processing, including a large proportion of manufacturing of consumer dairy products (cheese, yogurt, butter) would be at risk of being shifted to countries with lower processing costs, mainly the US, New Zealand and the EU, with no guarantee of lower prices for consumers.
Also, if the system were to be eliminated, it would increase Canada's trade deficit in dairy products, which already stands at C$6.8bn (US$5.5bn).
NAFTA renegotiation
René Moreau, president of Agropur, said the company understands the importance of international trade agreements.
"However, we also believe such agreements must reflect the circumstances of all stakeholders and their industries,” Moreau said.
“We trust in our government to fully protect Canada's supply management system and defend our interests in the NAFTA talks. We assure the government of our full cooperation."
Agropur said it will continue keeping a close eye on the work and discussions surrounding the renegotiation of NAFTA as the talks enter their sixth round.
Founded in 1938, Agropur, which had sales of C$6bn (US$4.8bn) in 2016, has 3,345 members and 8,000 employees at 39 plants across North America.
