The Gazette (Montreal, Canada) | By IAN JACK | March 24, 2003
Dairy farmer Chris Birch is going up against his own industry association in a fight for survival.
The Barrie, Ont., farmer has been selling directly to the United States for over two years, a practice the Dairy Farmers of Ontario has decreed must stop within months. The group said his business is illegal after a World Trade Organization ruling that Canadian milk exports are illegally subsidized.
But Birch and about 100 other dairy farmers said the WTO decision is a pretext and the real motive is reasserting the monopoly of the provincial milk marketers.
The case cuts to the heart of the milk system in Ontario and Quebec, where most of Canada's milk is produced. In Ontario, farmers pay $27,000 to the Dairy Farmers for a licence to milk one cow. With an average herd of 60, the cost of getting into the industry is prohibitive for many. The number of dairy farmers in Canada has fallen by more than one-fifth since 1990 to 19,000 today.
In return for paying for the quota, farmers get a guaranteed buyer and price.
Birch held a factory job to help carry the loan on his 55-cow quota until the plant closed in 1992, then struggled on until 2000.
"The quota was always too big a burden," he said in an interview.
Then he got an idea - sell the quota, pull out of the domestic industry entirely, and ship all his production straight from the farm to the United States, where he sold it to plants producing cheese.
Because he is outside the domestic industry, he and his fellow non-quota farmers, about 35 of whom he represents directly, are not subsidized and should not come under the net of the WTO decision.
That decision, based on a complaint from the United States and New Zealand, found Canadian dairy exports are illegally cross-subsidized by virtue of the high prices guaranteed by the domestic supply management system.
In reply, Gordon Coukell, chairman of Dairy Farmers of Ontario, told his members in a Feb. 25 memo that "the DFO board will adjust current regulations to bring Ontario into compliance with the WTO decision. These plans include ... all producers will be required to hold the minimum of five kilograms of quota."
Bringing non-quota farmers back into the system will kill their ability to say they are unsubsidized, representing the death of Birch's business plan.
But Birch said he will not go back to struggling to pay the bank loan on his quota.
"I'm 46 years old and I'm not going to mortgage over 20 years," he said. "I'd sell out of dairy and do something else."
Birch's Georgian Bay Milk Co. has launched an appeal of the Dairy Farmers decision, an appeal that must be heard by the Dairy Farmers' own board. Birch has also launched an appeal.The Gazette (Montreal, Canada):
