TPP may not have opened the floodgates, but it will let in enough imports to alter the outlook for Canada’s dairy farmers
It would have taken a lot more than a butter knife to cut the tension on dairy farms across Canada this past year while the Trans-Pacific Partnership (TPP) negotiators were talking behind closed doors.
So now that the deal is out in the open, and now that it appears — at least on the surface — that farmers might be able to work with it, you might think they’d be happily setting about to forget all those sleepless nights.
That’s not what’s happening. Not at the board level, and not for individual farms.
Looking back, dairy farmers learned a lot from the Canada and European Union Trade Agreement (CETA) negotiations that they were able to use in the TPP talks, says Therese Beaulieu, assistant director of strategic communications for the Dairy Farmers of Canada (DFC).
“With CETA, we learned some lessons,” Beaulieu says.
In particular, Beaulieu says, DFC learned a lot about what it takes to keep from getting thrown off their game.
Sure, it would have been ideal to avoid having to make any market concessions, she agrees. But you have to live in the real world, she says, so the big lesson was to concentrate on the good of the industry, not just on exactly how many kilograms of which milk components get to cross the border.
“We want this industry to continue to be healthy,” Beaulieu says. “We want this industry to continue to grow. That’s what we needed to focus our energy on.”
Most dairy farmers seem to agree TPP resulted in rules they can live with, but they also agree on something else, and so does Beaulieu.
Now is the opportunity for farmers to ask themselves what they would have done if things had turned out worse.
Any business needs to wrestle with those hypotheticals from time to time, Beaulieu says. “In other sectors of agriculture, the market swings and the farmers who survive are the ones who are thinking longterm, are doing investment and keeping their eye on their business goals,” she says. “In dairy, the new reality is that almost 25 per cent of milk produced will be affected by world prices.”
photo: File
Add in the fact that world dairy price fluctuations are getting bigger, and it means that even though Canada’s supply management system has been left intact, there will be significant impacts for farmers.
At the bottom, it’s also similar to debates about GMOs, humane housing, and anti-microbials, Beaulieu says. Whether you’re in or out of supply management, trying to stonewall any and every kind of change is rarely if ever a winning strategy.
So if TPP forces a lot of dairy farmers to carefully consider what they do and where they ultimately want to be, then that may be a good thing.
Agriculture doesn’t always get that chance, she says, and she points to the disruption BSE brought to beef.
Sometimes, she says, all the planning in the world can’t mitigate every problem. The best anyone can do is take away the lessons that they can.
For milk producers, one of the lessons was that supply management is only a tool, not impenetrable armour.
“Supply management doesn’t mean that you don’t have to worry about the market,” Beaulieu says. “Most of the farmers I know have an eye on what’s going on internationally.”
Learn from the wheat board
Wheat growers emerged as winners when they tested the market before the pool collapsed
Ross Purdy, of Ross Purdy Agriculture Business Advisors in Airdrie, Alta., believes getting on top of cash flow goes hand in hand with paying attention to working capital. On today’s farms, it’s more important than it has ever been, he says, because the business today is so much more sophisticated.
“When I first started lending money to farmers a long time ago, it was less complex and people had a better handle on what they could and couldn’t withstand,” Purdy says. “Now, a well-managed operation always anticipates if something unusual happens.”
Purdy doesn’t mean that farmers need to operate in a constant state of paranoia, but he does feel it’s important to avoid complacency. He believes this was really evident in Western Canada during the demise of the Canadian Wheat Board.
Farmers who had explored new ways of selling their grain before the wheat pool collapsed didn’t end up struggling as much to adapt, Purdy says.
“A lot of people that were successful had not been using the Canadian Wheat Board as much, thinking someday they may no longer be around and of course, they weathered the storm better than others who did not do that,” Purdy says. “Any good operation has to anticipate the skies falling to see where you would end up and where you could do things differently than you’ve done in the past.”
Be warned up front, this very well may result in some money being left on the proverbial table. For example, you may be able to enter into a supply agreement with people at a price that you need right now. Then, later on, the free market may exceed that price at times. But if it ensures you can pay more for a new quarter section than what the productive value of that land is and you’ve locked that cost in as far out as you can to avoid the risk of an increase in interest rates, Purdy argues it’s worth at least considering.
“Your ultimate goal is to protect equity, and part of equity erosion in agriculture of course comes when prices correct,” Purdy says. “What’s in your control is what you watch.”
What you can control
To take the bumps out of any transition, keep your focus on the issues you can take charge of
Our success at changing during tumultuous times has a lot to do with our perceptions, not just our skills and capabilities, says Dr. Kathleen Kevany, associate professor at Dalhousie University.
It’s a crucial point, because focusing on what we can control changes our perceptions, and it means we can weather hardships with less frustration.
“Whether we see ourselves as powerful and capable, or whether we see ourselves as being subject to external factors more than we desire, that’s a very different orientation to the world,” Kevany says. “If we can align our expectations more in keeping with what is likely to happen, then our frustrations are much more reasonably managed.”
Kevany grew up in southwestern Ontario, so she’s observed how the regulatory nature of farming and the growing impact of external factors can lead more farmers to question whether they’re really in control.
But the nature of the farm lifestyle also fosters an ability in individuals to overcome challenges, a trait that gets called “resiliency” in the academic world.
Typically, we may think resiliency is learned and deployed as an individual, but Kevany says her work also explores ways that resiliency can be nurtured collectively by entire communities. Within the farming community, developing a sense of belonging, a sense of trust, and confidence in reciprocal relationships are all really critical in the recipe for improved resiliency.
In fact, her top advice to farmers who want to cultivate their ability to thrive in times of change is simply to have parties.
“The more you know someone in good times, the more likely you’re going to be available to each other when times are tough,” she explains. Engaging with other individuals who are subjected to similar external pressures and managing to succeed in spite of those challenges can be very empowering, Kevany says. But if you’re going to get maximum impact, as an individual and as a community, don’t limit the guest list to only the most successful.
“Include marginalized or less active individuals in the community because they are often the ones most vulnerable in a crisis,” she advises. In other words, when trouble comes to the community, these individuals become the first casualties. Mentoring or accepting mentorship during a crisis, or at any time, has great potential to foster personal capacity.
“Those emotional events are not without purpose,” Kevany says. “Interpersonal relationships are core to our success in any field, but particularly in farming.”
Source: Country Guide
