SMEs are getting 60 per cent of the quotas and there is a 50/50 split between manufacturers and retailers. The feds also announced details of two programs to assist cheesemakers and dairy farmers worth $350 million
OTTAWA—The Canada-EU Comprehensive Economic and Trade Agreement is coming September 21, and in preparation the federal government is establishing two new tariff rate quotas for European cheese.
A 16-million-kg quota covers cheeses of all types, while a 1.7-million-kg quota addresses cheese used in food processing.
According to the federal government’s Canadian Dairy Information Centre, Canadians consumed a total of approximately 450 million kilograms of cheese in 2015—or 12.5 kilograms of cheese per person.
The two quotas will be open to new entrant applicants—companies that do not currently have an allocation under Canada’s existing World Trade Organization cheese tariff rate quota (TRQ)—and eligibility for an import permit will be assessed on the basis of each applicant’s activity in Canada’s cheese sector, not on a history of cheese importing activity.
Applications for a 2017 CETA TRQ will be accepted until September 8, for importation to begin October 2.
The quotas will be phased in over five years, reaching the maximum negotiated market access quantity in January 2022, and the quantity that importers will be able to import in the first year CETA is in force will be pro-rated to the period of time between September 21 and December 31, 2017.
With respect to how the quotas break down, small and medium-sized businesses will get a generous slice of the wheel. 30 per cent of the quotas are allocated to small and medium sized cheese manufacturers and another 30 per cent is earmarked for small and medium-sized distributers and retailers.
Large manufacturers will be allocated 20 per cent and large distributors and retailers will receive the remaining 20 per cent of the quotas.
There is a 50/50 split of the distribution of quotas between manufacturers and retailers/distributors.
The news was not welcomed by Dairy Farmers of Canada or the Dairy Processors Association of Canada. The two organizations are dismayed that the feds decided to allocate 50 per cent of the quotas to retail and distribution, instead of providing a bigger share for Canadian cheesemakers.
“We had hoped the government would prioritize the allocation of the new TRQs to cheesemakers, who would have imported cheeses that are not already produced in Canada, providing greater variety of cheeses to Canadian consumers, while supporting the continued growth of the Canadian dairy sector,” said Pierre Lampron, president of Dairy Farmers of Canada.
Leveling the Playing Field
While dairy producers and processors may be disappointed in the import quota allocations, the feds are making good on a promise made in November 2016 to provide financial assistance to the sector.
On August 1, federal officials unveiled details of two programs worth $350 million, aimed at helping cheesemakers and dairy farmers deal with CETA.
The five-year, $250 million Dairy Farm Investment Program will provide robotics and other automated systems to improve farm productivity, while the four-year, $100 million Dairy Processing Investment Fund will offer capital for equipment and infrastructure to dairy processers, along with providing access to specialized expertise to introduce new products and processes.
“These two programs will assist Canada’s dairy producers and processors to prepare for CETA implementation, within a strong supply management system,” said Lawrence MacAulay, minister of Agriculture and Agri-Food.
The Dairy Farm Investment Program will provide up to $250,000 (per licensed dairy farm) to support cow milk producers in making upgrades to their barn technology and equipment. The program will support large investments: such as the adoption of robotic milkers and feeding systems; and small investments: such as herd management and barn operation equipment.
The government says all producers of cow’s milk, irrespective of the size of their operations, are welcome to apply, and the program will begin accepting applications August 22.
The Dairy Processing Investment Fund will provide up to $10 million for each capital investment project, such as installing new equipment and infrastructure, or up to $250,000 for each project to access technical, managerial or business expertise.
Not-for-profit organizations involved in the dairy sector can also apply.
“Our government is working to ensure that the benefits of trade are delivered to middle-class workers, families, farmers and businesses of all sizes and all regions across Canada. The implementation of CETA will also provide dairy producers and processors an opportunity to modernize their operations and become more competitive,” said François-Philippe Champagne, minister of International Trade.