Quebec dairy farmers concerned after Trump's comments in 'America's Dairyland'

Some of Quebec's dairy farmers are worried about their industry, as tensions rise between the United States and Canada over tariffs.

During a speech in Wisconsin Tuesday, Trump said Canadian dairy industry rules are 'one-sided' and unfair

Timothy Keenan, a dairy farmer in Cleveland, Que., says the supply management system allows for small family farms, like his, to exist. (CBC)

Some of Quebec's dairy farmers are worried, as tensions rise between the United States and Canada over tariffs and the way Canada manages the industry.

The farmers' concerns come after U.S. President Donald Trump blamed Canada for unfair practices that hurt American dairy producers.

"He's a very powerful man," said Yann Rioux, owner of Ferme Gambler in Victoriaville, Que.

Rioux and other dairy farmers in the province are worried Trump may affect the rules governing Canada's dairy industry.

Trump targeted Canada's dairy industry Tuesday during a trade speech he made in Wisconsin, which is considered the heart of America's dairy industry.

U.S. President Donald Trump said Canada's supply management system doesn't allow American dairy farmers to compete fairly. (CNN)
"In Canada, some very unfair things have happened to our dairy farmers," Trump said. He specifically mentioned Canada's dairy supply management system, which he called a "one-sided deal" that doesn't let U.S. farmers compete fairly.

"I run a small farm with only 60 cows, so any change to the supply-management system would have a huge impact," said Karine Moreau, who runs a farm in Coaticook, Que., just north of the Vermont border.

Imposes quotas, stiff tariffs for exports

The dairy supply management system has been a key part of Canada's dairy industry since the 1970s.

It imposes a quota on dairy farmers, thereby controlling how much dairy and other agricultural products are produced. At the same time, it guarantees stable prices, which protects farmers from weather and market fluctuations.

It also imposes stiff tariffs – as high as 300 per cent – on dairy imports.

According to many Quebec dairy farmers, it's an effective system.

"We don't have to be the American buffer tank for their dairy production. If they have a lack of management in their production, that's their problem. On this side of the border, we have a system that works well," Rioux told CBC.

Timothy Keenan, a dairy farmer in Cleveland, Que., in the Eastern Townships, agrees. His family has been in the dairy business since the 1840s.

"Supply management gives myself and my family the ability to make a living as a farm, to keep this as a family farm."

Driving up prices?

But some see the supply management system as a protectionist policy that drives up prices for consumers.

"It forces Canadians to pay higher prices for staple foods. It also reduces the competitiveness of our own industry through this protection," said Jackson Doughart, policy analyst of the Atlantic Institute for Market Studies.

"If we had market system instead, and we exported more, these would be more efficient operations and we would benefit from more trade and lower prices."

The supply management system imposes quotas, controlling how much dairy and other agricultural products are produced. (The Canadian Press)
The supply management system is not the only issue bothering U.S. farmers.

There's also what's called ultra-filtered milk, a highly concentrated milk protein. U.S. producers can sell it in Canada without a tariff, but Canadian producers recently lowered the price of some of their milk ingredients, offsetting the competition to deliver a blow to American exporters.

Premier defends family farm

Quebec Premier Philippe Couillard vowed to talk tough with the U.S.

"I believe that a family-size farm deserves to be defended," Couillard said.

"If the Americans want to have a later discussion about subsidies in agriculture, well, we have a few on their side that we can point to. We will have a very direct and very frank discussion."

Canada's ambassador to the U.S., David MacNaughton, said that Trump is wrong.

In a letter sent to several governors, MacNaughton said dairy farmers in Canada are not responsible for the woes of the American dairy industry.

With files from Alison Northcott and Salimah Shivji