DFO POLICY CONFERENCE
By Sharon Laidlaw, Amy Reusch
and Jennifer Nevans
[
Editor’s note: Dairy Farmers of Ontario recently held its annual policy conference in Alliston, Ont. Magazine
staff filed these reports based on the discussion papers and interviews conducted after the conference.
TIME IS OF THE ESSENCE
Industry stakeholders discuss need to modernize and adapt to new market realities
T
he world is increasingly moving
toward open borders and the Canadian dairy industry must be prepared to respond, says DFO’s chair.
“We know the industry must change and
adapt to new world realities. We also know
we need to have our government officials on
side and understanding what we are doing.
We want to be in their ears, not their faces,”
Ralph Dietrich says at Dairy Farmers of Ontario’s Spring Policy Conference last month.
Dietrich told delegates DFO’s board
does not believe protesting for greater border control for legally permitted imports
will work. “We do not think it is a fight
we can win.”
Instead, the industry should be pushing
hard to modernize, he says, and the way to
do this is through the Ontario ingredients
program.
“DFO’s board fully agrees what is an
ingredient at the border should be an ingredient at the processing plant,” he says.
Yogurt and cheese standards would
limit milk protein isolates use in cheese
production, he says, adding cheese standards alone will not address the need to
modernize and find markets for domestic
ingredients.
“Only the ingredients program can and
will create an environment for modernizing
and investing into domestic ingredients.”
Current dairy market conditions need investment because they are no longer sustainable, and therefore, implementing the ingredients program is a race against time, he says.
“Time is of the essence. Canadian dryers are approaching the end of their useful
life. The Canadian market requires more
butterfat, yet the lack of ability to process
the associated skim milk solids results in a
dynamic that limits the market for domestic milk to meet consumer demand and
increases processor reliance on imports.
We need all industry stakeholders to realize we do not have time,” Dietrich says.
The ingredients program will support
growth in butterfat requirements for cream
and butter, Dietrich says. Rebuilding butter
stocks and growth in the butter market has
a direct impact on the size of the structural
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APRIL 2016 | MILKPRODUCER
surplus, says Phil Cairns, DFO senior policy adviser. The strategy’s key objective is to
position domestic ingredients so they can
be an alternative to imports and reduce the
associated structural surplus.
“We need to put domestically-produced
protein (skim milk) back in Canadian
cheese and yogurt products,” Cairns says.
Many have tried and are still trying to
derail Ontario’s implementation, says Peter Gould, DFO general manager. “There
has been tremendous effort to derail the
Ontario ingredients program, Gould says.
“If people put half as much effort into doing something constructive, we would be
twice as far down the road.”
DUTY DEFERRAL PROGRAM
Another issue facing the industry is the misuse of the Duty Deferral Program (DDP).
The program was designed for manufacturing, not agriculture. The challenge for our
industry is some importers have used the
DDP to import dairy products and other
foods, and defer their duty payments for up
to four years before they re-export, Dietrich
says. This makes it difficult to forecast required milk production each year to ensure
the industry meets consumer demand.
“It is important Canada’s border measures be enforced to ensure the supply
managed system functions properly. The
misuse of the Duty Deferral Program to
import dairy products is disrupting the
management of our system,” he says.
Dairy and poultry products have their
own specific program called the Import
for Re-Export program (IREP). Dietrich
noted supply managed products should be
excluded from DDP because the IREP program already exists for these goods when
importing products for the purpose of
re-exporting valued-added food products.
MODERNIZATION
Gould went on to say DFO did not embark on the ingredients program without
first having support from key stakeholders
within the province. “We appreciate the
support we’ve been given thus far from
Ontario stakeholders,” he says.
Gould conceded an Ontario only program may not be consistent with the “spirit” of pool or national agreements or even
voluntary agreements, but that saving the
industry is of “utmost importance.” The
real question, he says, is “what happens if
we don’t successfully implement an ingredients program?”
Time is running out and the industry
needs to start the