More Canadians have likely slathered their late-summer corncobs with American-made butter in recent years 91裸聊视频� and it had nothing to do with U.S. President Donald Trump91裸聊视频檚 demands for more access to Canada91裸聊视频檚 dairy market.
The country91裸聊视频檚 protected market has been a key sticking point between Ottawa and Washington during the tense renegotiation of the North American Free Trade Agreement. Throughout the process, Trump has made repeated calls for Canada to let in more American dairy products.
U.S. farmers recently enjoyed extra access to the Canadian market 91裸聊视频� and, in this instance, the opportunity came because of Canada91裸聊视频檚 controversial protective system known as supply management.
Butter imports from the U.S. nearly quadrupled between 2015 and 2016 to help satisfy Canadians91裸聊视频� sudden surge in demand for the creamy product that domestic producers couldn91裸聊视频檛 immediately keep up with. Canada wasn91裸聊视频檛 alone 91裸聊视频� butter sales saw strong growth in many parts of the world.
To satiate the rapidly expanding appetites of Canadian butter lovers, the federal government approved a request to temporarily open its doors to more imports above the usual quota. Due to proximity, lots of it rolled in from the U.S.
After shipping 2,275 tonnes of butter to its northern neighbour in 2015, the U.S. sold 8,266 tonnes here in 2016 and 8,672 tonnes last year, according to Statistics Canada. From 2008 to 2014, the figures show annual U.S. butter imports fluctuated between 1,069 and 4,482 tonnes.
The recent influx of American butter also boosted Canada91裸聊视频檚 stockpiles, which expanded to 44,708 tonnes in July 2018 from 11,571 tonnes in January 2017.
Critics have long argued supply management leaves Canadians with fewer choices in the supermarket, leads to higher prices for consumers and stifles innovation in the industry.
When it comes to butter, some say the fact Canada had to increase U.S. imports in a time of need points to another key downside.
Domestic producers, they maintain, cannot respond quickly to surges in demand because they91裸聊视频檙e hindered by the system91裸聊视频檚 strict rules. There are also concerns that there91裸聊视频檚 too much focus on the Canadian market, rather than a push to expand deeper into the global market.
But defenders of the system insist the recent boosts in U.S. butter imports show why it91裸聊视频檚 so effective.
91裸聊视频淭hat is the supply-managed system 91裸聊视频� you make sure your market is getting the milk and dairy products it needs without overproduction and without dumping products,91裸聊视频� said Graham Lloyd, general manager and CEO of the Dairy Farmers of Ontario.
91裸聊视频淏ecause we manage the amount of milk production to meet the domestic market requirements, it takes time to ramp up and sometimes to ramp down. So, when there91裸聊视频檚 shortages we want to import 91裸聊视频� to make sure we service the market.91裸聊视频�
The quotas protect the Canadian market from an influx of milk products in the U.S., where there91裸聊视频檚 vast amounts of oversupply. Many warn that opening the floodgates to American milk products would overwhelm Canada91裸聊视频檚 market and put a large number of farms out of business.
The sudden need for more butter a few years ago led the Canadian Dairy Commission to request supplementary import permits for thousands of tons of the product. Under normal circumstances, a World Trade Organization agreement signed by Canada says it must import 3,274 tonnes of butter from around the world every year and much of it has come from the U.S.
Lloyd and other industry leaders say Canadian producers caught up to the increased demand by late 2017 and there91裸聊视频檚 no longer a need for extra butter imports beyond the WTO quota.
91裸聊视频淲e can say that the system is working well, this is why we defend it firmly 91裸聊视频� because it91裸聊视频檚 a good system,91裸聊视频� said Pierre Lampron, president of the Dairy Farmers of Canada.
But experts like Sylvain Charlebois, a food distribution and policy professor at Dalhousie University, said the fact Canada had to raise its butter-import levels is an example of what91裸聊视频檚 wrong with supply management.
He argued the market would be more flexible if supply management didn91裸聊视频檛 exist because it forces producers to obey specific rules and prices. In times of rising demand, producers are left with fewer options to adjust, he added.
The mechanism, Charlebois said, also fails to support an economic growth agenda.
91裸聊视频淒emand for butter is up everywhere around the world 91裸聊视频� and we don91裸聊视频檛 have a system in place to take advantage of that,91裸聊视频� Charlebois said.
91裸聊视频淪o, we are importing more butter to supply Canadians, but what about opportunities elsewhere?91裸聊视频�
Canada exported about 16 tonnes of butter to the U.S. in 2015, 75 tonnes in 2016 and 19 tonnes in 2017, according to Statistics Canada.
Supply management dates from the 1970s and was part of an effort to stabilize dairy prices by limiting imports and setting fixed prices. It has been emulated by other industries, including chicken, eggs and turkey.
The regime has been front and centre at the NAFTA bargaining table.
Concerns in Canada that NAFTA could fall apart over the protected dairy market has lit a fire under a long-running domestic debate over whether to keep the system intact.
Prime Minister Justin Trudeau has promised to maintain the system against U.S. calls for greater access. Sources say Ottawa has offered some limited concessions on access, but has defended the supply management system itself.
Adam Plater, an independent agricultural trader and analyst, came across the numbers that show the recent increases in U.S. butter imports and in Canada91裸聊视频檚 inventories.
Plater believes more transparency is needed around how storage levels are determined for products like butter to better inform the public as well as those in the industry who want to diversify into new export markets.
Andy Blatchford, The Canadian Press
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