Chairman’s message

This is our first Annual General Meeting in two years, and my first as chair. I began my new duties in a context of unprecedented crisis. Our industry had to adapt quickly to unstable and chaotic market needs, while all of Québec went into lockdown.

Food production was quickly recognized as an essential service by the Québec government. This allowed us to continue doing what we do best: provide highquality food to Quebecers.

You, as dairy farmers, were asked to make a major contribution by reducing production in the middle of spring, when herds were at peak production. Your solidarity and collaboration helped achieve the desired results and demonstrated the flexibility of our supply management model.

This would not have been possible without the essential collective marketing tools our dairy farmers have adopted. The Québec and Canadian response to the crisis has been quicker, better coordinated and more efficient than in countries not benefiting from this tool, particularly the United States.

South of the Canada-U.S. border, the government had to invest major amounts to support its industry. The Farm Bill, which compensates farmers when their profit margin drops below a certain threshold, rose from US$279 million in 2019 to $637 million in 2020. The government also invested nearly $4 billion in dairy programs and products for food aid.

Our revenues were definitely lower than what was envisioned for 2020, with an increase of only 0.46% over the entire year. However, the joint efforts of all the provinces resulted in triggering the exceptional circumstances mechanism, which led to an increase of nearly 2% for Classes 1 to 4 in February 2021.

The pandemic also highlighted the importance of sharing risks. That is what the 10 Canadian provinces did by deciding to pool all their revenues starting on June 1, 2020 to restore the economic environment and position us better for the future as Canadian dairy farmers.

The context of the pandemic, combined with the increase in imports linked to the trade agreements, resulted in reducing our growth rate. Over the past year, Canadian market requirements have risen by 0.49% and the P5 quota by 0.64%. This is in contrast to the 3.7% average of the past five years. Despite growth that was lower than expected and the limitation of production from April to June, provincial production nonetheless increased by 1% in 2020.

We owe this growth to our consumers, who remained loyal to our products even though the crisis changed their habits and places of consumption. Quebecers became aware of the fragility of the supply lines in several fields, particularly the food sector. They developed a common determination to consume locally, according to local rules, and reduce our dependence on foreign products. This desire for autonomy is at the very core of our agricultural model. We must seize this opportunity to strengthen public support for supply management. The situation shows that our model is dynamic and innovative, that it still has its place and that it can renew itself.

For a long time, we have appealed to this consumer solidarity. The little blue cow logo is the ideal tool to help consumers recognize dairy products 100% made with our milk to encourage local farmers. We deserve this confidence, but we must continue our efforts to preserve it.

Consumers are increasingly concerned about the quality of the food they put on their plate. They ask for natural, local products, produced in respect for animals and the environment. This is precisely what we offer them. With our proAction certification program, we have the means to prove our good practices and continuous improvement efforts.

We won a major battle in 2020 by obtaining an official announcement for the payment of compensation in relation to the market shares conceded under CETA and the CPTPP. However, this announcement doesn’t end our battle for compensation. Despite the many commitments, no announcement has been made yet regarding the Canada-United StatesMexico Agreement. In addition to market concessions that affect our production level on the farm and our incomes, this agreement ties our hands by limiting exports of products that allowed us to enhance returns from solids-non-fat surpluses (SNF). The 35,000-tonne limit on milk protein concentrate and skim milk powder exports represents a serious challenge.

The entire industry must address this problem. At the farm level, we will work to reduce the quantities of SNF produced in all provinces. The processors must increase their processing capacity and develop new outlets. This will require significant investments for which we will need government support. I call on all our governments to show imagination and work with us to implement a long-term vision for our industry.

As for the future, we are continuing to request that the government honour its commitment not to make any more concessions in the dairy sector in future trade negotiations. Canada showed it was capable of this by concluding a transitional trade agreement with the United Kingdom without sacrificing any additional market share.

Whenever our government concedes access to dairy markets, a greater number of Canadian dairy products are replaced with foreign products on our store shelves. Our farms are jeopardized by this type of decision. This impacts our farm families, people who earn their livings thanks to the dairy sector, and our rural communities. We must end this erosion if we want the Canadian dairy industry to continue to be vigorous and dynamic.

In March, the House of Commons voted for a committee review of Bill C-216, which seeks to prevent breaches in supply management in the next negotiations of trade agreements. Even though it still has to be adopted in third reading, this is a very important moment in the defence of our system! The Québec National Assembly also renewed its support by adopting a motion that calls on the Government of Canada to protect the supply management model in its entirety in the context of future international agreements. This is another significant initiative.

This support is the reflection of long years of discussions with our elected representatives to make them aware of our issues and the impacts of their decisions on our industry, our businesses and our families. It is also the result of a nation-wide effort, as well as actions taken by the leadership of our province and our farmers.

Other trade agreements will undoubtedly be negotiated in coming years. It is important to maintain our support to ensure that there are no further breaches of our supply management system or erosion of our markets. It is up to us to promote our supply management system, which provides local produce and food security for everyone. Quebec has over 10,000 dairy farmers. We must not underestimate the importance of our role in informing our fellow citizens.

SignatureDanielGobeil

 

 

 

Daniel Gobeil, Chairman

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