Dairy Makes NAFTA Negotiations More Challenging

If dairy has benefited from NAFTA so much, why is it one of the biggest hurdles in the negotiations? The answer is simple: Canadian supply management. ( Farm Journal )

The impact the North American Free Trade Agreement (NAFTA) has had on U.S. dairy sales is well documented. NAFTA is credited, in large part, for the growth of U.S. dairy exports from 4% in 1996 to 14% in 2017. If dairy has benefited from NAFTA so much, why is it one of the biggest hurdles in the negotiations? The answer is simple: Canadian supply management.

“Unlike in the U.S., where the price of milk is subject to the free market, in Canada the price is negotiated beforehand. The government sets the rules of the negotiation, and then farmers and processors determine the price. Not only that, a quota system set up in 1971, known as supply management, controls the amount of milk each farmer may produce,” says Christopher Booker, a reporter for PBS.

As part of the NAFTA renegotiations, the U.S. is demanding that Canada leave its supply management system. Canadian dairy farmer Peter Strebel says the end of Canadian supply management is not a fair request.

In 10 years, they’re giving us absolutely nothing in exchange,” he told Booker. “I mean, if that’s supposed to be a win-win partnership, I don’t get it. I don’t know.”

Canada's Minister of Foreign Affairs, Chrystia Freeland, says Canada is hoping for a win-win solution, but they will protect their nationalist interest.

Listen to Booker’s full story here.



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Submitted by Chad on Wed, 02/07/2018 - 07:55

"If dairy has benefited from NAFTA so much", why are US farm milk prices so terrible? Every country has a responsibility to make sure their food production system is secure. Part of that means making sure you still have farmers. We should learn from Canada and get our own house in order rather than hope to treat them as another milk dumping ground.

Submitted by Dale on Wed, 02/07/2018 - 13:35

We need to identify the problem real here. Everyone north of the border seems to be happy and making money. At least they are not complaining about the milk price chronically falling below the cost of production. Why would we require them to change to a system similar to ours where many if not most people involved in the industry are not satisfied? We need to take the framework of their system, improve on it, and implement it in the U.S.. We could do away with the MPP, MILC, LGM, CWT, whole herd buyout, and all the other failed dairy programs past and present. In their place we could have a program ran by people in the dairy industry that would leave bankers, equipment dealers, the general public, and most importantly ourselves happily paying our bills and reinvesting our money in the local economy. This industry needs leaders far more than it needs negotiators trying to pick apart a system that produces successful results.

Submitted by Joan on Thu, 02/08/2018 - 15:25

Your comment, Dale, is full of common sense wisdom. However, common sense currently does not exist among those who negotiate NAFTA and other trade agreements. Canadian farmers, consumers, and politicians work together to assure themselves a safe, domestic milk supply. In agreement with you that US should be able to take a successful program like the Canadian dairy program and make it even better for the American farmer...
And, when that is accomplished the powers that be could work on a health care system overhaul that includes basic coverage for all, again taking a cue from the best of the Canadian and European systems and using American leadership to forge an excellent national health care system.

In reply to by Dale (not verified)

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