HomeMy WebLinkAboutThe Citizen-Agriculture 98, 1998-03-18, Page 24Supporting the industry
With world markets opening up, the Dairy Federation of Ontario, as well as its national
counterpart, are striving to protect the Canadian pricing system and tariffs for the dairy
industry.
Dairy farmers battle government
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PAGE A-4. THE CITIZEN, WEDNESDAY, MARCH 18, 1998.
Agriculture '98 r
By Janice Becker
Citizen staff
As global issues arise over tariffs
and subsidies, Canadian dairy
farmers must also battle their own
federal government for protection
of their industry.
A relatively new product has
been created for use by manufac-
turers of processed dairy products,
such as ice cream, which is slipping
into Canada with no tariff, said
John Core, chair of the Dairy Farm-
ers of Ontario, at a recent Huron
County dairy producers meeting in
Brussels.
The product is a butteroil/sugar
blend used in the manufacturing of
lower quality ice creams, he said.
Butteroil is created by taking all
the water out of butter, leaving 99
per cent butterfat, a common prod-
uct in the Far East.
The problem arises when the
product is imported through the
United States to Canada. Butteroil,
as a single ingredient has a tariff of
332 per cent, said Core.
However, when blended with 51
per cent sugar, which is subject to
an 80 to 160 per cent countervail
duty, the butteroil/sugar blend is
no longer considered a dairy prod-
uct and therefore does not fit into a
Canada Customs classification and
was tariff free as of January, 1998.
When Canadian producers saw a
decline in demand for their indus-
trial milk, but the market need was
rising, they looked into imports.
Industrial milk in Canada
accounts for 60 per cent of the total
quota for producers. The importa-
tion of butteroil/ sugar consumes
2.5 per cent of that 60 per cent
demand, costing dairy farmers $50
million in the 1996/97 dairy year.
"We were told we were protected
from dairy blends when the govern-
ment stopped rock salt in dairy
products. We were told all blended
products would be captured under a
proper, high tariff line. We were
told this problem with
butteroil/sugar would be discussed
with several involved groups," said
Core.
However, with the matter now
before the Canadian International
Trade Tribunal (CITT), Core said it
appears the sides have "drawn lines
in the sand."
"We are in a battle with the
feds."
With the advances in technology,
Core said it is possible to break
down milk into several components
then bring them all back together.
"Where does it all stop?" he
asked.
"This fight has been ongoing for
two years. Canada has to Act then
deal with it properly."
Core also has serious concerns
about the mandate given the CITT
by the federal government.
The question to be answered is
whether there should be tariff rate
quotas created for blended prod-
ucts.
Core said, "This is not and has
never been the question. Dairy
farmers simply want the products
put on an existing tariff line to pro-
vide import control."
The dairy producers organiza-
tions have refused to participate in
the hearings because they believe it
is stacked against them, he said.
"The feds have sidestepped their
political responsibility."
With Federal Minister of Agri-
culture Lyle Vanclief upset about
the Lack of participation, Core said
CONTINUED ON A-5
By Janice Becker
Citizen staff
In an effort to cut the cost of
transporting milk to processors, the
Dairy Farmers of Ontario, in asso-
ciation with the Ontario Milk
Transport Association, developed a
rate formula late last year.
Dairy farmers spent $55 million
moving their product last year with
an average cost of $2.22 per hec-
tolitre, compared to Quebec's
$2.02.
After considerable negotiations,
the organization resolved the matter
with a savings of $2_4 million,
below the $2.7 million target, but
within the desired range.
It is expected the 4.3 per cent
reduction can be absorbed by the
system through such things as con-
trolled driving speeds.
Driver's will also see a 1.5 per
cent wage increase as well as
money for uniforms, if currently
required.
A reserve has also been retained
for a "theoretical" spare truck
though the ratio has been increased.
Funding had stood at one
replacement truck for every eight in
operation. That ratio has risen to 10
to one.
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