Andrew Coppolino: Local cheesemakers fear smaller market slice with Europe trade deal

Given the choice between purchasing local cheese or a wider range of even slightly less expensive European cheese, which would you buy?

It's a question many artisanal cheese producers across Canada are asking in light of the CETA trade agreement due to come into effect in July.

The Canada-European Union Comprehensive and Economic Trade Agreement (CETA) will have different impacts on different agriculture sectors. While the agreement will likely be good for pork producers, cheesemakers are concerned because CETA will mean that an additional 18,000 tonnes of cheese a year will eventually be allowed into the country tariff-free.

The issue of trade gained more momentum given U.S. President Donald Trump's comments regarding NAFTA and Canadian dairy earlier this week.

'We are in jeopardy'

"CETA is good for some parts of the industry but the dairy sector is pulling the short end," said Adam van Bergeijk of Mountainoak Cheese in New Hamburg.

"We are in jeopardy. We're getting bombarded with products from Europe where the producers are subsidized. That's why they can make cheaper products."

Mountainoak has been operating since 1981, but van Bergeijk said they are preparing for a challenge.

"I think we're going to lose between four to five per cent of our income as a farm. But as a cheesemaker, we're going to lose between 10 and 20 percent. It might end up that I have to fire people, which I don't like, but I'm not going to make it this way."

Currently, Canada allows about 20,000 tonnes of cheese into the country tariff free annually. About two-thirds of that is allocated to the European Union. Canada, of course, has access to the European market with CETA, but local cheesemakers likely couldn't make a dent: The entire nation produces roughly 460,000 tonnes of cheese, while EU cheese exports alone total 790,000 tonnes.

Rather than a subsidy from a government, Canadian supply management for the milk used to make cheese operates on a quota system based on domestic consumer demand. It ensures stable prices for dairy farmers and, many say, allows small family farms to compete.

'Room to grow'

Will Makxam at River's Edge Goat Dairy in Arthur, Ont., has a different view. While he's using milk that is not under the supply management regulation of cow dairy, he still faces competition from European cheese producers.

"We've always had a concern that European cheeses have been slowly creeping into the market, but we model our cheeses from European cheeses," said Makxam, adding quickly that so far, competition hasn't hurt.

But with more European cheeses on the market, the question for him is: Will customers go for that, especially if it is cheaper?

"On the other hand, it increases the awareness of different cheeses to the North American market and if anything our sales have gone up," he said.

Eight years ago, River's Edge made only three different cheeses; now they produce over 20, many of which are sold at the Kitchener Market.

"Introducing more dynamic cheeses means that people are going to be more aware. I think there's tons of room in Ontario to grow."

'Not an even playing field'

Ruth Klahsen of Monforte Dairy in Stratford isn't so sure. She said that CETA could mean that local cheesemakers can't compete and grow.

"The European price point is so much less than ours is. I just think it's not an even playing field. The consumer has to understand that when they make decisions about how they are going to spend their dollars," Klahsen said.

Agricultural subsidies make European cheese less expensive to make. Payments in the tens of billions of Canadian dollars – 38 per cent of the EU budget – are made directly to EU farmers to ensure them a safety net and are granted in the form of basic income support not associated with production, according to publications of the European Commission.

"About 25 to 30 percent of what we pay for milk is what they pay," Klahsen said. "And there are more subsidies than just on the cost of the milk. I don't have an opinion about whether that is the right thing to do or the wrong thing to do. I just don't think the playing fields are even."

Klahsen wants cheese shoppers to understand that fact when they buy European cheeses.

"When customers buy my cheese, I need to figure out how to pay my farmers enough for their milk that they can make a living, and I need to figure out how to pay my staff a living wage. My cost is higher than the cost of the European cheesemakers."

As for the industry's growth, Klahsen said CETA will slow local cheese production and prevent investment in developing new local cheese companies. "To create sustainable farming and practices and as far as the long-term health of our agriculture goes, we should be creating more artisanal industries in Canada and that will be impeded by this trade agreement," she says. 

Van Bergeijk at Mountainoak agreed the impetus toward local is critical.

"Always try to support your local economy because a part will flow back to you," he said.