The following transcript is protected under a Creative Commons Attribution-NonCommercial-NoDerivs 2.5 License.
Kootenay Co-op Radio CJLY
Nelson, B.C. Canada
March 8, 2007
Title: Deceivable Dairy II
Producer/Host: Jon Steinman
Transcript: Dave Nelson
Jon Steinman: And you're tuned in to Deconstructing Dinner, a syndicated weekly program produced at Kootenay Co-op Radio in Nelson, British Columbia. I'm Jon Steinman
It was back on January 25th, 2007 when we aired part I of a 2-part series here on the program titled Deceivable Dairy. When the dairy industry is one of the most aggressive marketers within the agriculture and food industry, our collective perception of products such as milk, cheese, yogurt, butter and ice cream, is one that sees such products as clean and wholesome, but in part I of the series we discovered why dairy can be rather deceiving. Discussed on that broadcast were issues that questioned the impact our reliance on pasteurization has had on human health, animal welfare and Canadian communities, we explored the alternative to such a model, that of raw milk production, the sale of which is illegal in all parts of the country. We heard of the impact your stick of butter and bowl of ice cream has on climate change, given the modern dairy industry relies heavily on the cultivation and importation of grain. We heard from experts on how this dominant grain-based confinement system has affected animal and human health given it is in a cows' nature to eat grass.
That broadcast has been archived on our website if you did miss it.
And today's part II of the Deceivable Dairy series will continue from where we left off with part I. My last guest on the show was Ric Llewellyn of Jerseyland Organics located in Grand Forks, British Columbia, and Ric shared a rather grim picture of the manner in which many dairy cattle are raised and treated here in Canada. He introduced how the veal industry is a by-product of the dairy industry. And it's for these reasons we will take a closer look into the rules and regulations that govern the welfare of dairy cattle in this country, and you will be surprised to discover how such laws and regulations are actually non-existent. Ric Llewellyn also introduced how the supply management system that governs the price and supply of milk in Canada has taken away his ability to produce milk and has restricted him to produce non-fluid products such as cheeses and yogurts. But as supply management is seen as one of the last remaining models that protects the financial well-being of Canadian farmers, we will learn more about how this system is managed, what are the benefits, and what are the downsides.
Joining me on the program will be Shelagh MacDonald, the Program Director for the Canadian Federation of Humane Societies and Jan Slomp, a dairy farmer from Rimbey Alberta and the Alberta coordinator of the National Farmers' Union.
Also on today's broadcast will take a look at the three largest dairy processors in Canada, who, between the 3 of them, control 70% of all dairy processing in the country.
increase music and fade out
JS: For those who turn on the television from time to time, you may have noticed a recent marketing campaign that has been launched here in Canada by Kraft a significant processor of dairy products here in the country. And the product being marketed is Kraft Singles – those slices of processed cheese. The main characters within the 30 second advertisement are computer generated cows who run around the screen with smiles on their face having a wonderful time as they carry packages of processed cheese to eager consumers. But is such an advertisement misleading, are cows producing milk for Kraft in fact happy and content when doing so. A similar campaign for California cheese has been ongoing now for a few years where the same thing, computer generated cows graze in lush fields of grass, where they play football and live happy lives. This was highlighted on the May 11th 2006 broadcast of Deconstructing Dinner, as an aggressive campaign and lawsuit was launched in response to this marketing, alleging that the image of happy cows is false advertising. Cows on the other hand are said to lead very painful and abusive lives within industrial dairy production. But coming back to the Kraft Singles advertisement, what is also of interest to note, is the controversy surrounding the dairy within the product itself, as Kraft Singles do not contain any milk, but an ingredient known as Milk Protein Concentrate, and we'll learn more about this prevalent ingredient later on today's broadcast.
But back to this topic of animal welfare, there was much learned from part 1 of this Deceivable Dairy series when Ric Llewellyn of Jerseyland Organics pointed to the conditions cows live in within the dominant industrial dairy industry. Many operations are confining their animals for their entire lives where the concentration of ammonia from the manure is enough to make most humans not last more than a few minutes. The cows live their lives on concrete floors, which coupled with a diet of grain and silage leads to the prevalence of lameness, a condition affecting the hooves of cattle and leading to discomfort and an inability to stand. Another common ailment is Mastitis, which is inflammation of the udder and generally caused by bacteria getting into the milk glands. Ric pointed to the high levels of stress these animals are exposed to as being a leading cause of this condition. Adding to the stress and welfare of the animals is the quick removal of newborn calves taken from their mothers almost immediately after birth. And while such conditions would be seen as normal within the industrial dairy industry, these conditions are non-existent on Ric Llewellyn's farm where animal welfare is at the top of his priorities.
And so the big question is, how is the welfare of dairy cows regulated and monitored here in Canada. The topic of animal welfare has been a discussed on number of broadcasts of Deconstructing Dinner, and it was the January 12th, 2006 broadcast when we first learned of the Recommended Codes of Practice that set out voluntary guidelines for family farmers and intensive livestock operations. Within that broadcast we learned of the impact our purchase of eggs has on baby male chicks, who, being of no use to the egg-laying industry, are recommended within the Code of Practice to be thrown into high-speed grinding machines for quick and easy disposal. Not the information you normally find on a carton of eggs.
JS: And a quick reminder that all broadcasts of Deconstructing Dinner are archived onto our website where the Eggs broadcast can be heard along with part I of today's 2nd part of the Deceivable Dairy series, and that website is cjly.net/deconstructingdinner.
So what are the Recommended Codes of Practice for the handling and care of Dairy cattle and how were they formed. Well surprisingly, the organization overseeing the codes of practice was The Canadian Agri-Food Research Council (otherwise known as CARC), and on September 29th, 2006, CARC ceased operations and no longer exists. To learn more about the codes of practice and what will take their place, I spoke with Shelagh MacDonald, the program director for the Canadian Federation of Humane Societies, an organization that was one of a number of stakeholders in the creation of the codes back in the 1980s. I spoke with Shelagh over the phone from her office in Ottawa, and she first describes how the codes of practice for the handling and care of farm animals here in Canada were first developed.
Shelagh MacDonald: The Canadian Federation of Humane Societies was very instrumental in the beginning of the launching of the concept of having codes of practice. Actually at that time, back in the early 1980's, we were actually at that time suggesting regulation suggesting that the government introduce regulations for the care of animals on farms. So the government did some computations and decided that this would be the better way to go. Even at that time and certainly I would say increasingly so, our government is tending I think away from regulating and having to you know have more of a hands on involvement in things. I think that seems to be a bit of a trend, but instead handing over the authority more to the stakeholders involved and so that is sort of what they did in this case and actually the CFHS actually co-ordinated the development of the first of several codes. This mean that we took on the administration of doing that we were still only one voice at the table but we co-ordinated the meetings and did all the paper work for that, subsequently that was handed over to CARC the Canadian Agri-Food Research Council funded by the, well we were funded by the government of course too, but CARC took that over and CARC has since been dissolved. But that's a whole other story (laughs). So, the point was to bring together stakeholders involved in a particular commodity to develop a set of standards, I guess is not the right word because they are not mandated I think we think of standards as something that's required. They are voluntary but they are intended to establish some kind of a standard level of care for each commodity. So they are specific to each commodity and they cover various husbandry aspects, housing, feed.
JS: While the Canadian Federation of Humane Societies was one of a number of parties helping to develop the codes, Shelagh describes the level of support the CFHS currently has for the Codes of Practice set for dairy cattle in Canada.
SM: Well I am not going to comment specifically on the details of the Dairy Code. It is one of the older codes, it was written in 1990, and certainly the dairy industry wants to revise it and that it definitely recognises that it needs to be revised. One of the problems, particularly in the older codes, I think some of the newer codes have been a little bit better but they tended to very vague in general wording so but it doesn't, you know there is so much wiggle room in there again that you know that they are not mandated anyway but you know words like "adequate care," "suitable feed," "suitable air temperature," what ever it is so that's definitely been one of our concerns, is the vague wording so it would actually make it difficult to verify whether or not they were being adhered to. So that is sort of a general comment. But certainly we agree that the dairy code is more outdated and does need to be updated to reflect what it is happening in the dairy industry today.
JS: As it came as a shock to me to hear that the primary mechanism in place here in Canada for ensuring the welfare of farm animals is voluntary, I thought maybe, just maybe, there is a system set up to monitor whether such voluntary recommendations are being met. But that does not seem to be the case.
SM: That is one of the fundamental aspects of the oversight of farm animals that the CFHS is calling for. Although we have been involved in the process of the code development over the last 20 or more years we have been involved in all of the codes that have been developed and we certainly are committed to that, we want to be there at the table we think it is important for us to reflect the animal welfare voice at the table but we have been a little bit frustrated that they haven't been more meaningful, that they haven't been more stringent and that a process hasn't been put in place to verify them.
JS: As mentioned just earlier, the codes of practice for the handling and care of farm animals in Canada were developed by a number of groups who have a stake in the industry itself. As the Canadian Federation of Humane Societies was the only animal welfare group who was part of the creation of the codes, Shelagh describes the other stakeholders involved in their development.
SM: Yeah, well you know, as you can imagine it is difficult to be the one and only voice around at a table of industry people, but I also at the same time, I don't want to paint the picture that, you know, we are the only ones there who give a hoot about animals. I don't want to present that, you know, the realities are that is our mandate, that is our main focus, and you know, the producers and processors around the table have a different focus. But I wouldn't want to suggest that they don't care about animal welfare. I think there is, you know, certainly a growing interest in animal welfare from the producer's side and I think that they genuinely do care and want to do their best for their animals, but obviously, you know, they are doing that looking through the eyes of, you know, what are the economics and the practicalities and the efficiencies of dealing with animals. So, we recognise that everyone is coming from a different perspective. So, I would say that it has been difficult for us to have a loud voice there, but at the same time I think it is important for us to be there and that we have been heard and that, you know, I think we have had, definitely had an impact.
JS: And you're tuned in to Deconstructing Dinner and part 2 of the Deceivable Dairy series. We're currently listening to clips from my conversation with Shelagh MacDonald of the Canadian Federation of Humane Societies.
As the Canadian Agriculture and Research Council disappeared in September 2006, the Codes of Practice for the Handling and Care of Farm Animals in Canada have now been placed into the hands of an organization established in 2005 known as The National Farm Animal Care Council, on which sits the Canadian Federation of Humane Societies.
And as we look at how such a council is dominated by those representing the agriculture and food industry itself, to better understand their motives, it's important to look at how much farming has changed over the past few decades, and the figures are rather startling. Between 1980 and 2004 the number of farms in Canada decreased by 70%, while on the other hand, the production of milk increased by almost 6%. This in turn led to an increase in volume of milk produced per farm by 251%. Now such changes are of course the result of shifts in production methods, farming practices and technology. So has such a shift worked to the benefit of the animals themselves? Shelagh MacDonald responds.
SM: I think with dairy there definitely have been some improvements due to research into housing and husbandry systems that have benefited cows from the point of view of comfort and some of the state-of-the-art milking machines. At the same time, the move towards larger, intensive housing, production systems and much higher production, I wish I could quote the numbers, but the milk production per cow now is just so much greater than it was a few decades ago. So, and that then, obviously has an impact on each individual animal, the stress that it puts on them, leading to lameness and some foot and leg issues, that are obviously detrimental to the cattle themselves, so I think that is certainly one of the things that has come about through intensive systems and working towards greater productivity per animal.
JS: What was one of the more startling facts learned on part I of the Deceivable Dairy series was that the veal industry is actually a by-product of the dairy industry. In order to maximize the output of dairy cows, they of course need to always be pregnant and or lactating, and this leads, to a constant supply of baby calves, but the male calves are of no use to the dairy industry, and herein lies the beginning of the veal industry. The production of veal is of course one of the more controversial practices within agriculture, and for those who oppose it, it probably doesn't sit so well to known that the price of a container of yogurt, a stick of cheese or a carton of chocolate milk, is reflective of the inclusion of veal production in the dairy chain. And I asked Shelagh Macdonald if the Canadian Federation of Humane Societies supports the methods used to turn baby male calves into veal.
SM: Obviously there are huge concerns about the veal industry from the animal protection side. Veal calves are kept in very small crates. When they are smaller, when the calves are younger they can turn around but not for very long, I believe. They are kept in those, I believe they go to market at about 16 to 17 weeks if I am not mistaken. At a certain point, once they are larger they make certain they can't turn around and they can't, they have no movement at all. They can stand up, or lie down. And they're also they're not fed proper nutrition so that's how they're getting the white, the very white meat. We do not support that husbandry system no.
JS: So having now heard the perspective of the Animal Welfare community, how does the industry itself recognize some of these deplorable conditions that were best illustrated in part I of the Deceivable Dairy series. This industry perspective was made apparent following the recent publication of a booklet created by the Alberta, Saskatchewan, Manitoba and Ontario Farm Animal Care Associations, associations that are comprised of members of all of the provincial livestock industries. The publication was designed for consumers to better understand this issue of animal welfare, and the booklet was titled Farm Animals: Who Cares? (now there is a question mark after who cares? and admittedly it is a pretty unfortunate choice for a title as it could of course have two meanings. But there is a question mark after the words who cares?). That aside, the Canadian Federation of Humane Societies took a look at this publication and to say the least, was not impressed for a number of reasons, and Shelagh Macdonald first describes why.
SM: Our criticism of it was, well partly because our name was used in it immediately following a sentence that we think is actually very inaccurate, but we also found that the document really is presenting a very utopian view of farming in Canada. We don't think that it's presenting a realistic view of some of the confinement systems so we think that Canadians are getting a distorted view from this type of document about what is taking place on the farm.
JS: I will note that we have set up a link to this publication from our website at cjly.net/deconstructingdinner so you can check it out following this broadcast. And when taking a look through the publication there are a few references and sentences that did not sit well with the Canadian Federation of Humane Societies, and are said to be untrue and misleading. One of these sentences reads the following, “Animal neglect and abuse are against the law.” There is additionally a suggestion that farmers and animal factories must adhere to provincial animal care laws. As has already been indicated, there are no laws in Canada governing the welfare of farm animals, and so Shelagh Macdonald of the CFHS responds to these concerns.
SM: Yeah, the sentence states that there are, actually quoting, "laws set minimum standards and are meant for prosecuting problems after they occur. Farmer's groups have gone much further in helping to develop recommended codes of practice for care and handling of farm animals." To me that reads that there are laws that set minimum standards and farmers have gone even better than that to develop codes of practice. Well, that is very far from the truth. There are no laws that set minimum standards for farming, and certainly what laws there are really would not go any farther than the Codes of Practice. For example, the province of Manitoba actually has mandated the Codes of Practice because they have referred to the Manitoba Animal Protection Act, specifically refers to Codes of Practice. So people who are raising animals in accordance with the Codes of Practice would be considered to be providing good care for those animals. So, A) it's not accurate to say that the codes are better than any minimum standards, and certainly there are not minimum standards for farmers, other than the current federal Criminal Code which is extremely basic and currently very out of date, and that's a whole 'nother subject, we've been trying to get changes to the Animal Cruelty sections of the Criminal Code, but it basically requires very basic care, food, water and care, sorry, and shelter and it basically says you can't inflict intentional abuse or criminally neglect your animals, that's sort of the two fundamental aspects of the Criminal Code, and then most provinces have an Animal Protection Act that I guess, that's what they mean that sets minimum standards, but they exempt farm practices, most all of them really, all of the Provincial Animal Care Acts, have a long list of exemptions for pretty much any lawful activities. So Manitoba actually has a very good Animal Protection Act but you're exempt if you are carrying out an activity in accordance with a code of practice.
JS: Also located within the publication titled Farm Animals, Who Cares? is a section titled The Five Freedoms, and refers to what they consider the basis for responsible animal care. But for those listeners who recall the conditions discussed in part I of this series, the five freedoms that the industry funded Animal Care Associations list off, do not seem to be followed at all. The freedoms listed are as follows, number 1, freedom from thirst, hunger and malnutrition, number 2, freedom from discomfort, number 3, freedom from pain, injury and disease, number 4, freedom to express normal behaviour, and number 5, freedom from fear and distress. And Shelagh MacDonald of the Canadian Federation of Humane Societies comments on whether such freedoms are granted to Canada's dairy cattle.
SM: We agree that animals should have those five freedoms, but I would have to say that, no, a great number of farm animals do not have the ability to express normal behaviour and many of them are not necessarily free from discomfort. There aren't as many issues in the dairy industry as there are in others, generally there is some ability to socialize for example, for the dairy industry, although when the calves are removed from their mother, they are normally kept singly. We would prefer that they be group housed, sometimes they are but in most cases they are kept in single outside hutches. We don't like that as much, but going through the list, I mean the dairy freedom from thirst, hunger, and malnutrition, I would suggest that certainly they would normally have those needs met, and freedom from discomfort I would hope that for the most part they would, but you know there are certainly cases of lameness that may be caused by really hard flooring that causes them discomfort and that sort of thing. Again, I would think that the dairy industry would do better than some other industries. Certainly we would have very serious concerns about some of the housing systems, particularly for sows and for laying hens. Pretty difficult to argue that they would get to express normal behaviours, and freedom from discomfort, so.
JS: And that was Shelagh MacDonald, the program director for the Canadian federation of Humane Societies. Shelagh spoke to me over the phone from her office in Ottawa. We will have more information on Provincial Animal Care Association's publication titled Farm Animals, Who Cares located on the Deconstructing Dinner website, at cjly.net/deconstructingdinner.
I will also note that following its publication the Canadian Federation of Humane Societies wrote a letter to all of the provincial animal care associations responsible for the publication, and expressed their concern over the misrepresentation of the CFHS within the publication. The provincial associations have since responded to the letter, and have agreed to remove any reference to the Canadian Federation of Humane Societies within the electronic version of the publication.
JS: And you're tuned in to Deconstructing Dinner, a syndicated weekly one-hour program heard on radio stations around the world. The show is produced at Kootenay Co-op Radio in Nelson British Columbia, and I'm Jon Steinman.
If you're just tuning in, today's broadcast marks the second and final part of a 2-part series here on the program titled Deceivable Dairy. We have now taken a closer look at the politics of animal welfare in Canada and the surprising lack of laws and regulations that protect the animals that provide us with food. And while the picture painted may look rather bleak and that the purchasing of any products with dairy may now seem as a daunting task, let's not forget that much of the animal welfare information provided on part I of the series was from a farmer who has not adopted the industrial methods of farming that dominate the industry. As a result of his practices, his veterinary bills are almost non-existent, and his animals lead lives in the open-air where they can socialize and eat grass, as cows are so well-adapted to do. These farms do exist right across the country, and one resource to help get you started to find such farms, is by visiting a website called the Eat Well Guide and that address is www.eatwellguide.com. And of course another great place to start is by checking out your local farmers' markets where the opportunity exists to meet the farmers themselves.
JS: One of the reoccurring topics on Deconstructing Dinner is the financial stability of farmers not only here in Canada but around the world. Canadian farmers are currently in what is considered to be the worst farm income crisis since the time of the depression, but in the case of dairy, dairy farmers in Canada are perhaps the most financially stable of any sector. And there's a pretty good for this, and it's called Supply Management, a system that many Canadians may not be all too familiar with, but nevertheless is a system that governs the price and quantity of milk produced in the country. Supply Management is also used in the egg industry and poultry industry.
But there are mixed feelings over the presence of supply management here in Canada, for one, Ric Llewellyn of Jerseyland Organics who was a guest on part I of this series, is unable to produce fluid milk products as he is unable to enter into the tightly controlled supply management system. Instead, Ric is restricted to the production of non-fluid products such as cheese, yogurt, butter and sour cream. So while Supply Management is seen as one of the last remaining protections for Canadian farmers, there are critics who believe the system is not being managed as effectively as it should be, and to learn more about how Supply Management influences the dairy products on the shelves of Canadian grocery stores, I spoke with Alberta dairy farmer Jan Slomp, who raises a herd of 70-80 cattle in Rimbey, Alberta, not far from Red Deer. Jan emigrated to Canada from the Netherlands in 1989, and he is now the Alberta coordinator for the National Farmers' Union (NFU).
Jan and the National Farmers' Union take a strong position in support of Supply Management, but are opposed to the way in which the system creates barriers to the entry of new farmers. There is also a growing concern on the part of the organization that just as the Canadian Wheat Board has been slated for demolition by Stephen Harper's Conservative Government, Supply Management is also at a great risk. And in exploring these risks, we will also take a closer look at an ingredient found in many dairy products that many Canadians have probably never heard of, and it's an ingredient that is not approved as safe for consumption here in North America.
But first, what is supply management and how is it managed. Well, the system was first adopted for industrial milk production in the early 1970's in response to what were, at the time, very unstable markets, uncertain supplies and highly variable producer and processor revenues that had been common in the 1950s and 1960s. This then led to dairy being the first commodity in Canada to operate a national supply management system that is, at its foundation, governed on a national level by the crown corporation known as the Canadian Dairy Commission. I spoke with Jan Slomp over the phone from his farm in Rimbey Alberta, and he further explains the three pillars of supply management.
Jan Slomp: Supply management in Canada basically means that we have three pillars, under the dairy regulations, and one is that the dairy farmers in Canada are obliged to produce enough for domestic needs so we can never have a shortage, we are forced with our system to produce enough milk, and at the same time we are forced not to over produce, so that is the commitment we make. Dairy farmers in exchange for that commitment we receive a price for our milk that is based on the cost of production. That is the second pillar, and the third pillar is that we have import controls to make sure the system works within Canada.
Jon Steinman: The Supply Management System for dairy in Canada is managed both on a national and provincial level, and as Jan Slomp explains this structure, he refers to both industrial milk and consumption milk. Industrial milk refers to the milk that ends up in products such as cheese, butter, ice cream, and dry milk ingredients, whereas consumption milk consists of fluid milk products.
Jan Slomp: The industrial milk is a national pool of milk that is allocated to every province as a percentage of that pool, and if an increase in consumption takes place, the national pool divides that increase towards the provinces. Then for consumption milk we have a provincial allocated amount and so if the provincial consumption goes up or goes down, every province has to adjust. But we have between provinces, cooperation between the various dairy boards so in the four western provinces, for example, we have pooling of fluid milk. So whenever the consumption goes up it triggers an increase for all producers in the four western provinces, and vice versa.
Jon Steinman: There is a common perception that as a result of Supply Management, Canadians are paying more for dairy products than they would say in a country like the United States where supply management does not exist, but studies have shown that this is in fact not the case. And so as the system is in place to benefit farmers by ensuring a fair price is paid to them, it is also a system that benefits the consumer, and Jan Slomp explains.
Jan Slomp: There is benefits for producers as they have always the cost of production recovered from the price they receive at the farm gate. There is a benefit to consumers, that they never have fluctuating prices that are caused by shortage in supply or over supply, and the proof for benefit to consumers are in the fact that the dairy farmers of Canada have independent agencies for years checking prices in Canada, retail prices, and checking prices in the United States where things are not regulated. And every time the dairy package, its cheaper in Canada, than it is in the U.S. So it works for producers, it works for consumers and maybe not to forget here, that it also works for taxpayers as dairy farmers as well as other supply management commodities in the poultry sector, never qualify for a government bailout packages as they don't suffer negative incomes. So the taxpayer is off the hook with this system as well.
Jon Steinman: So while the benefits of Supply Management are apparent, there are certainly opponents to such a system, and understandably so. Supply management is in direct opposition to the model of free trade and the capitalist model of doing business. And these opponents are of course the processors, the big companies like Kraft, Nestle, Parmalat and Saputo who, if they had the chance, would want to pay much less for milk than they already do. But Jan Slomp indicates that the processors do in fact benefit from Supply Management, and he explains.
Jan Slomp: Oh, definitely, the processors they think this regulated farm gate price for milk has to go. Hardly anywhere else in the world it is a factor so, you know, that is one major way to improve their bottom line is have their milk purchased for a lower price. What the processors in Canada fail to see is that they also benefit from Supply Management. If you compare the Canadian processor with the processor in the United States, you find that processors in the United States have a lot more processing capacity sitting idle all the time because milk fluctuation in the States is drastic, you know. As cows tend to produce in a natural way which means calves in the spring have a flush of summer milk, can really go down in the fall. That is the natural influence on cows. If the days are getting shorter cows want to produce less milk, they want to increase their body weight to get ready for winter. You know, dairy farmers in Canada, we have the commitment to have a steady supply of milk, so we have to feed different, to calve out more cows in a certain part of the season to make sure that milk flow is constant. While in the United States there is extreme differences between the seasons, and the processor, as they have no regulation, they have to process milk, whatever comes their way. So they have a lot more processing capacity sitting idle all the time to deal with the maximum flow of milk. And in Canada their plant utilization capacity is so much higher that is a huge cost saving to the processor. But what they want, of course, is deregulate the farm gate price and have us still forced to regulate the flow of milk. So that is my expectation, they would like to do in Canada.
Jon Steinman: And you're tuned in to Deconstructing Dinner and today's part II of the Deceivable Dairy series here on the program. We are currently learning about Canada's Supply Management System for milk production, and to do so, listening to clips from a conversation I had with Jan Slomp, a dairy farmer from Rimbey Alberta and the Alberta coordinator of the National Farmers' Union.
The opposition to supply management by the big national and multi-national processors is again a result of supply management being a system that is not in line with the capitalist way of doing business. But within the system itself, there has been a value (or a capitalization) placed on what is known as quota, and quota is the allotment granted to individual producers permitting them to produce a predetermined amount of milk each year. And here is where the major concern over supply management comes in, as quota has been allowed to receive a value, the price of quota is now in many cases worth more than the cows, and this has created a number of barriers. And Jan Slomp describes this issue.
Jan Slomp: Of course, quota prices have come up steady since the inception of Supply Management, and at the National Farmers Union we have had had very early on quota policy developed to avoid the capitalization of quota, so that you know, when farmers want to enter the dairy sector they would have to qualify, get a permit and then would qualify for quota allocation depending on how many farmers would retire from the industry. And by no means, those policies are perfect, but instead of that becoming a reality we have had the marketplace taking care of things, and as a result of that the values of the right to produce milk have drastically increased and are at astronomical levels right now. And I don't think it serves anybody in the industry in the long term to have them this high. It is another threat for sustainability.
Jon Steinman: As the high price of quota has effectively limited the ability for new farmers to enter into the dairy sector, provinces like Ontario and Quebec have responded to this concern by stopping the exchange of quota, and are proposing a means through which these barriers to entry can disappear while maintaining quota values for farmers already farming.
Jan Slomp: Ontario and Quebec have actually stopped the quota exchange to address this high value, so what they are going to do is levy the amount of quota in a transaction and make that quota available to beginning producers or young expanding producers and then the provincial milk marketing boards remains the owner of that quota. So basically the producer, a young producer, gets to produce that milk but never becomes the owner of the quota, whenever that person decides to retire or change career, that quota goes in the provincial pool and can be allocated to new producers again. So that would basically, de-capitalize the quota system and it's a very good thing that we become creative and find ways to avoid this high cost of entry.
Jon Steinman: One of the important areas to look at when discussing the pros and cons of supply management is the impact such a system has on an environmental level. In parts of the country where the landscape is more restrictive, the high price of quota has had a significant impact on dairy production here in British Columbia for one. Up until 1993, Vancouver Island's unique situation as an island, allowed it to be independent of the provincial management system. But when the island was amalgamated into the provincial system, the dairies on the island began disappearing, and as of today, there is all but two dairies producing fluid milk on Vancouver Island. With such a high price placed on quota, and such a high price to import feed onto an island, the result was a weeding out of all of the smaller dairies that couldn't compete using the energy intensive industrial technologies that now dominate the industry. Here in Nelson for example, the closest dairy from which fluid milk originates is located 320 kilometres away. So in an age where the distance food travels is of a pressing concern to the environment and of a pressing concern in light of projected decreases in supplies of oil, can Supply Management allow for the increasing presence of not only more localized production of dairy, but also more localized processing. And Jan Slomp responded to this concern.
Jan Slomp: I think it holds the tools to do that. What of course, is not regulated at all is the rationalization of processing plants and ever since the co-op disappeared, and even when the co-op was still in business, we saw a rapid diminishing of the number of processing facilities across the country and of course, that was all with ah, under our present economic system, which is loaded with externalization of costs which always gives the benefits to larger processors further away from consumers and further away from producers. So we have to be creative in our economic system to build in the incentives to shorten that distance that food is travelling. I think supply management offers the tools because thanks to Supply Management we still have, to some degree, production of milk all over the country. So it is important to hang onto that and design policies that we are not giving up on that, but are pushing for more local production and processing.
Jon Steinman: Further on this topic of the environmental impact of Supply Management, there is too a concern raised within a system that demands a uniform product year round. Now in the Canadian climate and given the nature of cattle, it requires much more energy to satisfy this year round demand, given cows birth in the spring and are most productive then and into the summer. Compounding this, the energy required to grow grass is non-existent, whereby the energy to grow and transport grain to feed cattle in the colder seasons is very intensive. Jan Slomp comments on this environmental impact of Supply Management but first indicates the benefit the system has had in keeping Canadian dairy farms relatively small.
Jan Slomp: Maybe it actually has put the breaks on, you know. The average dairy in the United States is way larger than in Canada. You know, I can argue that it's thanks to Supply Management that we have industrialized our farms but not anywhere near to the level they have in the United States. But I think that will all become essential in our new economic system that we measure things for what they really are. I think what has been driving farm size is the fact that we externalize a lot of energy costs so replacing people with equipment and technology has been the direction in the last four or five decades. And I think we are entering an era that needs to be revised and reversed to some degree, you know. The best possible scenario is having our cows grazing grass and produce as much milk as possible from grass, because that is where solar energy comes to the dinner plate, and most of our more industrialized farms are using a lot of fossil fuel to bring feed from far away to the barn and bring that to the dinner plate, you know. Ten calories of fossil fuel for a calorie of food in our western production model doesn't look very good.
Jon Steinman: As supply management is widely supported by Canadian farmers and seen as a benefit to Canadian consumers, there have been many concerns recently raised in response to significant threat that is posed to undermine the protection that supply management provides. And this threat comes through the importation of milk ingredients from foreign countries, ingredients that are able to bypass tariffs. This flood of milk ingredients which predominantly consists of milk proteins, have begun to significantly replace the use of real milk in the production of Canadian ice cream, cheeses and yogurts. So for anyone who has noticed a decrease in the quality of your ice cream over the past few years, you now know one of the possible reasons as to why this is. This poses a significant threat to Canadian farmers given 36% of all Canadian milk is destined for cheese production. And Jan Slomp of the National Farmers Union describes the current tariffs that apply to imported milk ingredients, and why these tariffs do not apply to the milk protein imports that are undermining supply management.
Jan Slomp: What the border control entails is through WTO we have the right to apply two hundred percent tariffs on milk imports, and that two hundred percent, is needed because the price for milk imports is determined by at which price other countries want to let their product go. It is basically a dump price that we are dealing with at the border, and it needs that two hundred percent to keep it out. What processors have done in the last decade, it started out with corn sugar plants that were imported into Canada and were mixed with milk ingredients in Canada and were used as substitutes for ice cream making. So dairy products from abroad were diluted with corn sugar blends and would enter the country without being subject to tariffs. That has been kind of has been weeded out as the quality of the ice cream really diminished from that. So there was a limit as to how much processors could do that.
More recently, the last five years, we have seen a spike in importation of Caseinates, which are milk ingredients that are determining the yields for cheese making. So blends of Caseinates milk products from Europe and North America, or United States have come into Canada circumventing the tariff rules, and those products were used to blend with Canadian milk to get way higher cheese yields for the processors. And that has resulted in a reduction of seven or eight percent of our domestic production. A year ago when the Harper government was first elected, they struck a committee between processors and producers dairy farmers of Canada to address this problem, to sort it out. I guess they expected farmers to take a cut to stop this importation but the processors were not really willing to address this thing, other than looking at lowering the farm gate price. And so after a year things have not worked out at all. And now recently the federal government committed itself to stopping the growth of this import, mind you that might take some time before that comes into effect, but it is continuing to undermine our domestic milk production. But there is a commitment now to do something about it.
Jon Steinman: And you're tuned in to Deconstructing Dinner, produced at Kootenay Co-op Radio in Nelson, British Columbia. We're currently listening to clips from my conversation with Alberta dairy farmer Jan Slomp, who farms in Rimbey Alberta. Today's broadcast is part II of the Deceivable Dairy series.
I want take a couple of minutes here to digress somewhat but continue on this topic of milk ingredients being imported without restriction into Canada. These ingredients are increasingly replacing milk as an ingredient in the Canadian food supply, with the one of greatest concern being Milk Protein Concentrate or MPC. Now there are a number of groups deeply concerned over this growing and prevalent use of an ingredient, that believe this, is not approved as a food product. Groups in the United States such as the National Family Farm Coalition and a smaller organization known as Family Farm Defenders have worked hard to bring this issue to the public eye and here's some information from an article released by Family Farm Defenders in November 2006. They indicate that MPC is legal for use in glue and other industrial uses but it has never been approved for human consumption by the Federal Department of Agriculture (FDA). They indicate that the manufacturing of MPC is also problematic given the composition of MPC is a concentrated form of the least valuable components of milk. MPC further originates in countries that lack the health standards that exist here in North America, countries such as India, Russia and China.
Now the FDA did take action when in 2002 they conducted inspections of a number of facilities owned by Kraft, facilities that produce products such as Kraft Singles. During the inspection, the FDA discovered that their products were misbranded because they were labelled as a food. Such a definition did not comply with labelling standards given MPC is not approved as a dairy ingredient in the United States. The FDA demanded Kraft relable the product and the company has since changed the wording on the label of Kraft Singles from "cheese food" to "cheese product."
But here's an interesting story of a regular consumer wanting to find out some answers from Kraft after he too discovered that Milk Protein Concentrate was being used instead of milk in many of the company's products. His name is Mark Reed, and he gave Kraft's consumer information line a call and was then directed to the company's corporate headquarters just outside Chicago. He showed up in person and asked to speak to a nutritionist about Milk Protein Concentrate and was told to wait in the lobby. As he looked through the company's coffee table brochures a woman called him on the lobby phone and took his contact information. As he was on the phone with her, a security guard showed up and escorted him out of the building.
JS: There will be more information on this questionable ingredient found on the Deconstructing Dinner website under the title of today's broadcast Deceivable Dairy part II, and should you want to keep an eye out for the ingredient, you can scan your labels of cheese, yogurt, milk-based beverages, infant formula, desserts, soups and sauce mixes.
But as the unrestricted import of this ingredient into Canada is rapidly replacing milk in the food supply of Canadians, the commitment by the federal government to working on alleviating this issue is questionable. In an article published in the Western Producer, Minister of Trade David Emerson was seemingly too candid as he was quoted as saying that Supply Management's days are numbered. Since then the Conservative government has been playing damage control as they ensure Canadians that this is not the position of the Conservative government. And Jan Slomp of the National Farmers' Union comments.
Jan Slomp: The other thing that is under threat is the very fact that we have this ability to put two hundred percent tariff on imports. David Emerson, the Trade Minister said last fall that Supply Management is on the way out, as part of a whole agricultural package we cannot maintain that, and it is on the way out. So that has caused quite an uproar particularly in Ontario and Quebec and so farmers demanded a position from the federal government and the federal government, right away came out saying they were strong supports of Supply Management. And recently the Harper government has expressed themselves clear about that. But if you read between the lines there is not really a hundred percent commitment to stick to Supply Management, as they claim that other sectors are compromised by maintaining Supply Management and they say we need a balance outcome between various sectors. So when we enter trade negotiations, and they are actually ongoing in Geneva, the WTO struggles to reach an agreement, I am afraid that the Canadian government is very willing to put Supply Management on the offer block, in order to get other market access for other commodities. And so things are not as secure as what their rhetoric lets us believe.
Jon Steinman: During my conversation with Jan Slomp, I questioned whether the dairy industry in the United States is a good example of what the Canadian industry would turn into if supply management were to disappear. He indicated that such an outlook would be highly speculative, but he did provide these comments in terms of what he thinks would happen to the industry in Western Canada.
Jan Slomp: I assume that in Western Canada, you know, if you look at how groceries, the large groceries see their supply lines, it's mainly a big line coming from the United States. And we may have very economically viable dairy industry in Western Canada, you know, geographically and nature wise but if those grocers have their main supply coming from the U.S. for all of their grocery items, I think it is very hard to maintain dairy production in Western Canada, because for processors the economies of scale, and that is all looking in a crystal ball here, you know, assuming that the energy picture is not too upsetting, if we are going to pay a lot more for energy and for transportation, dairy farming without Supply Management will continue to take place, close to where people drink milk and eat dairy products. But under the present system we risk losing all that production in Canada and seeing it all coming from the United States, from large dairies and large processors. Because most of our dairy processing in Canada is not on a large scale.
Jon Steinman: And that was Jan Slomp, a dairy farmer in Rimbey Alberta. Jan is also the Alberta Coordinator of the National Farmer's Union, and you can find out more about the NFU on their website at nfu.ca
Jon Steinman: In wrapping up today's broadcast I thought it would be important to take a look at who the major dairy processors in this country are given 70% of all dairy production is controlled by only three companies. Now those three companies are Saputo, Agropur, both of which are Canadian and Parmalat, which is an Italian company. Some of the other major processors in the country are Arla Foods of Denmark, Danone of France, Unilever of the UK, Kraft and Nestlé, both American companies, Farmers Dairy located in the Atlantic provinces, and Gay Lea Foods among a few others. And sorry, Nestlé is not an American company but a Swiss-based company.
But taking a closer look at the three companies controlling 70% of Canada's dairy processing, we start with Saputo, the largest processor in the country and among the top 20 largest in the world. Saputo is based in Montreal, but also operates in the United States, Argentina and Germany. Their well-known brands in Canada consist of Saputo, Alexis de Portneuf, Armstrong, and Dairyland. The company also produces the well known line of Vachon baked goods.
Now the second of the three biggest players is AgroPur, a cooperative representing almost 4,000 dairy farmers. The company operates 21 plants in Canada and 1 in the US. The company's products consist of Yoplait, Natrel, Quebon, Island Farms, Sealtest, Babybel, Britannia, and many of the cheeses found in the grocery store cheese section.
But the most interesting of the three largest companies is Parmalat, and they control just under a quarter of all dairy processing in the country. It wasn't long ago that Parmalat was, in December 2003, involved in what the US Securities and Exchange Commission refers to as one of the largest and most brazen corporate financial frauds in history. Now it's important to look at the details of this given it was during the time that this fraud was taking place, that Parmalat was setting up its operations here in Canada, and when you look at in retrospect, Parmalat came into Canada, bought up a bunch of Canadian companies, all along doing so with money that never really existed. And Canadians are now faced with this foreign company controlling 25% of the country's dairy. And so what products does Parmalat produce, well they do have their own Parmalat label, but they also own the Beatrice brand, Lactantia, Astro yogurt, Black Diamond and Balderson cheese, Sensational Soy, Sargento, Parkay, Lactaid and they also produce many milk ingredients that end up in Canadian restaurants and packaged food manufacturers.
So who is Parmalat, and how did they make their way into Canada. Well the company was first founded in 1961 but didn't move into Canada until 1997 during a period that TIME Magazine refers to as the company's mission to build their company into the Coca-Cola of milk. Their entrance into the country began with the purchase of Beatrice and Ault, and as of today now employs more than 2900 people with 19 operating facilities coast to coast. One of the key figures who brought the company into Canada was Alberto Ferraris who was the CFO of the company during the six months leading up to the scandal. As he began his job he couldn't quite understand why the company was paying so much interest to service its debt, which in 2003 was 5.4 billion dollars. With a little further investigation, he discovered that the debt was in fact over 14 billion dollars. He brought this information to the CEO of the company who passed it off as no big deal. Ferraris later quit his job. And then on December 19th, 2003, the largest scam in European history was brought to light, and Parmalat confirmed that a four billion dollar account actually never even existed. Investigators now say that between 1990 and 2003, as the company set up its operations in Canada, Parmalat borrowed money from global banks and justified those loans by inflating its revenues through fictitious sales to retailers. You can learn more about Parmalat's products on their website at www.parmalat.ca.
Before closing out today's broadcast, I will remind listeners that today's broadcast will be archived on our website, and there will be a wealth of additional information relating to today's broadcast under the title Deceivable Dairy part II. And for those listeners wanting to take Deconstructing Dinner in your pocket, you can also subscribe to our free podcast through iTunes or through the Deconstructing Dinner website.
Jon Steinman: That was this week's edition of Deconstructing Dinner, produced and recorded at Nelson, British Columbia's Kootenay Co-op Radio. I've been your host Jon Steinman. I thank my technical assistant Dianne Matenko.
The theme music for Deconstructing Dinner is courtesy of Nelson-area resident Adham Shaikh.
This radio program is provided free of charge to campus/community radio stations across the country. Should you wish to financially contribute to this program, we invite you to offer your support through our website at cjly.net/deconstructingdinner or by dialing 250-352-9600.
Till next week.