A $4.3 Billion PR Problem

“Canada reaches TPP trade deal, will pay out $4.3 billion to farmers”

“Harper hails TPP, promises $4.3 billion to protect farmers”

“Harper promises $4.3B for dairy farmers”

Dairy and poultry farmers across Canada may have been disappointed to see the federal government open the border to more imports in the Trans-Pacific Partnership announcement on Monday, but deep down there was likely a feeling of relief that the damage to supply management was not as bad as it could have been.

At least at first glance.

There had been talk that Canada would open up 10 percent of its dairy market, but when the TPP dairy negotiations wrapped up in Atlanta around 5am on Monday, the Canadian negotiating team led by Kirsten Hillman managed to reach a deal offering additional dairy access of only 3.25 percent. For poultry and eggs, the market share sacrificed was even less. Not bad considering supply management was supposed to be Canada’s ticket price into the TPP.

On top of that, the Canadian government was ready to roll out $4.3 billion over the next 15 years to help dairy and poultry farmers adjust.

“We obviously would have preferred that no additional market access be conceded in the dairy sector,” said Dairy Farmers of Canada president Wally Smith. “However, we recognize that our government fought hard against other countries’ demands, and have lessened the burden by announcing mitigation measures and what seems to be a fair compensation package.”

In the short term, it looks like the supply management has come through the TPP agreement with a bruise or two, but still standing.

However, in the longer term, where public opinion truly matters, the marketing system for dairy, poultry and eggs is suffering some internal bruising that could do more damage than noticed in the early diagnosis.

The problem is that $4.3 billion is a lot of money. That number grabs attention. That’s why it’s in the national headlines listed above. Not only the regular pundits, but average Canadians, even other farmers, are questioning why that number is so big. Aren’t they still protected by import tariffs?

The multi-billion dollar programs might be justified mathematically, but it won’t help the perception among people who don’t understand the numbers or facts behind dairy farming. Why do they need that much money if they’re only giving up 3.25 percent or less of their market? Aren’t dairy farmers already wealthy? Why do our tax dollars have to go to them? Who else gets 100 percent of their income protected?

$4.3 billion will certainly be helpful to producers over the next 15 years, but it’s also coming at a cost. The attention it’s bringing to supply management is negative. People who have never thought seriously about the way eggs or milk are sold in Canada are questioning and criticizing the system.

It’s also hurt one of the fundamental supporting arguments for supply management. “It doesn’t require any government subsidies” is now a tougher sell.

Perhaps the headlines will blow over. Life will go on. But ultimately, supply management requires public approval, or at least public apathy, to maintain the status quo. If enough people are left wondering whether $4.3 billion in compensation is justifiable, public opinion could turn against the industry.

The initial blow from the TPP might not have been as bad as expected, but the treatment used to address the pain may in time prove to cause more damage.

(Full disclosure: Kelvin Heppner’s family owns poultry quota in Manitoba.)

Updated Monday evening to clarify last two paragraphs.


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