By Connor Lynch
OTTAWA — The recently signed Canada-Europe free trade deal (CETA), which is still waiting to be ratified, is good news for Ontario grain and livestock farmers, but not so much for dairy farmers in the province, according to industry representatives.
Here’s what the deal means for Ontario grain, beef, and dairy farmers.
Ontario’s trade on corn and soybeans with Europe was already thriving, but winter wheat was not and that’s going to change under CETA, said Grain Farmers of Ontario chair Mark Brock. Tariffs on soft red winter wheat, the most commonly grown in Ontario, are getting reduced, which means more exports to the EU and more money in farmers’ pockets, said Brock.
He added that Ontario grain farmers are going to also get some spillover benefits for livestock producers. “Anything that entices producers to make more pork or beef means they need more grains to feed them, and that’s good for us as well.”
Europe’s opposition to GM crops is more of an opportunity for non-GM growers than an issue for GM crop growers, Brock said. He added that since the EU is an affluent society “if they’re looking for non-GM crops, they have the ability to pay for that,” which he said is an opportunity for any farmer growing non-GM crops or considering starting.
The deal could end up being $600 million for Canada’s beef industry but that’s down the road and there are still technical issues to be dealt with, Canadian Cattlemen’s Association president Dan Darling said.
The big advantage for Ontario producers is that Europe represents an untapped market for undervalued beef products, said Darling. Japan, for example, opened up a market for beef tongue at $18 per lb., whereas beef tongue goes for $3 or $4 in Canada, he said, adding producers could see similar opportunities in Europe.
The major obstacle to the deal, however, is one that Darling doesn’t see Europe changing its mind on: the use of growth promotants. “We have resigned ourselves to the fact that they will never take any animal that has ever used growth promotants,” he said.
But a European palate that has never had grain-fed beef might represent a new market for producers. Beef supplies in the EU are largely from Australia and New Zealand, which raise their cattle on grass, said Darling, adding that the different flavour of grain-fed beef might help generate European interest in Canadian beef.
What CETA will mean for Ontario’s dairy industry has been known for years, said Eastern Ontario Dairy Farmers of Ontario director Nick Thurler, and it’s not good news. “Nobody likes to get a cut in pay but that’s what it is.”
The deal means a loss of 2.2% of quota for Canadian dairy producers, or about 2 kilos of quota for the average Ontario dairy producer, said Thurler.
He added that Ontario is fortunate to have a strong supply management system, and that the recent increase in quota this year (6 per cent over the summer) should help offset the losses.
The federal government announced $350 million for the Canadian dairy sector to help offset the effects of CETA as well, $250 million for producers and $100 million for processors. Thurler couldn’t say whether or not it would be enough, but said it was “a good start.”
The deal has no upsides for the dairy industry, Thurler said. But, “It’s not going to put anybody out of business. When you have the EU and Canada trying to make a deal, you have to give something to get something. So hopefully it’s good for the rest of the country.”