Canada helps dairy as part of agriculture package

By Jim Cornall contact

- Last updated on GMT

Dairy Farmers of Canada said  said the funding falls short of the expectations set out by the Canadian Federation of Agriculture and there is a need for further support. Pic: Getty Images/Rowena Kong
Dairy Farmers of Canada said said the funding falls short of the expectations set out by the Canadian Federation of Agriculture and there is a need for further support. Pic: Getty Images/Rowena Kong

Related tags: Dairy, coronavirus, Canada

This week, Canadian Prime Minister, Justin Trudeau, announced measures within agriculture programs and an investment of more than C$252m (US$178.8m) to support farmers, food businesses, and food processors who provide essential services to Canadians every day by ensuring a safe and reliable food supply.

He also announced that the government intends to propose an additional C$200m (US$142m) in borrowing capacity for the sector.

The Government of Canada is creating a C$77.5m (US$55m) Emergency Processing Fund to help food producers access more personal protective equipment (PPE), adapt to health protocols, automate or modernize their facilities, processes, and operations, and respond to emerging pressures from COVID-19 so they can better supply Canadians with food during this period.

It is also launching a national AgriRecovery initiative of up to C$125m (US$88.7m) in funding to help producers faced with additional costs incurred by COVID-19.

The Government said it intends to increase the Canadian Dairy Commission's borrowing limit by C$200m to support costs associated with the temporary storage of cheese and butter to avoid food waste. The government will work with opposition parties to achieve the required legislative change.

It is also creating a Surplus Food Purchase Program, with an initial C$50m (US$35.5m) fund designed to help redistribute existing and unsold inventories, which could include products such as potatoes and poultry, to local food organizations who are serving vulnerable Canadians.

Interim payments to provinces and territories will be increased from 50% to 75% through AgriStability, a federal, provincial and territorial program that supports producers who face significant revenue declines. This change has already been enacted in some provinces.

It will also work with provinces and territories to explore possibilities for expanding the AgriInsurance program to include labor shortages as an eligible risk for the horticulture sector. This work with provincial and territorial partners would insure against lost production due to an insufficient workforce, should producers be unable to find enough labor to harvest.

"Canadians count on farmers and producers to provide them with the food they need to feed themselves and their families. Today, we are giving them the support they need to keep their workers safe and food systems running during this challenging time, for the benefit of all Canadians,"​ Prime Minister Trudeau said.

DFC approval, but more needed

The announcement will provide relief for dairy farmers amid the COVID-19 pandemic, according to Dairy Farmers of Canada (DFC).

"Never have we seen such fluctuation in demand for milk from one week to another, and despite the best efforts to manage production to align with consumer needs, bottlenecks resulted in milk having to be disposed at the farm, something no dairy farmer wants to see,"​ DFC president Pierre Lampron said.

 "Dairy Farmers of Canada welcome the measures announced today by the federal government, which will help offset the impacts of bottlenecks in the supply chain that have prevented dairy from getting from the farm to the store shelf."

The situation was compounded by a dramatic decrease in business in the hotels, restaurants and institutions sector (HRI sector), which resulted in a reduced requirement for dairy.

The commitment by the government to work with opposition parties to increase the Canadian Dairy Commission's capacity to store dairy products until the market rebounds is an important one, Lampron said.

"This commitment needs to be fulfilled as this will provide timely relief to the dairy sector to help align the dairy offering to meet consumer needs today, and into the coming months.”

DFC also welcomed the announcement of a surplus food purchase program.

"Solidarity with our communities is a value that is near and dear to dairy farmers, which is why we have committed more than C$10m (US$7.1m) in dairy products to food banks across the county to support Canadians in need,"​ said Lampron.

However, the DFC said the total funding falls short of the expectations set out by the Canadian Federation of Agriculture and there is a need for further Government support for the broader agricultural sector.

Related topics: Markets, Fresh Milk, Cheese, COVID-19

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