Canadian dairy farmers line up for fourth Dairy Direct Payment Program payout

Supply-managed Canadian dairy farmers will receive the fourth and final direct payment under the Dairy Direct Payment Program, designed to reimburse producers who have been impacted by the CETA and CPTPP trade deals inked by the government.

Under CETA – Canada’s trade deal with the European Union – the EU’s share of the Canadian cheese market increased by 18,500 tons, which according to Canada’s National Farmers Union represents a 185,000-ton loss of fluid milk production for Canadian dairies. The Dairy Processors Association of Canada estimated that dairy producers faced around CAD670m (USD490m) in lost market share and diminished returns on investment. Under CPTPP, Canada’s free-trade deal with 10 Asia-Pacific countries including major dairy exports Australia and New Zealand, Canadian dairies faced a loss of CAD160m per year, according to Dairy Farmers Canada.

To compensate producers, the government allocated up to CAD1.28bn (USD940m) to the country’s dairy producers for the first three years of the Dairy Direct Payment Program (DDPP), with the fourth and final round totalling CAD468m (USD343m).

Eligible farmers are reimbursed based on their milk quota; for example, an owner of an 80-head dairy farm will receive CAD38,000 (USD27,880). To get their payment, producers must register through the Canadian Dairy Commission before March 31, 2023.

Future compensation

In its 2020 pre-budget submission, DFC estimated that the combined market access granted under CETA, CPTPP and CUSMA is equivalent to an average annual loss of CAD450m (USD330m) in Canadian farmer revenues. The body also projected that by 2024, 18% of Canada’s domestic dairy production will be outsourced to foreign producers.