Decision Important to Dairy Producers

A World Trade Organization body ruling that favours Canadian dairy exporters will benefit Nova Scotia. Ernest Fage, Minister of Agriculture and Fisheries called the Dec. 3 ruling important for Nova Scotia dairy producers.

Six per cent of Nova Scotia's dairy production is marketed under international commercial export milk (CEM) contracts that were in dispute. Nova Scotia's dairy producers export a greater proportion of milk under CEM contracts than producers in other provinces.

The United States and New Zealand had complained that Canada was not meeting commitments it made in the 1994 Agreement on Agriculture related to export milk pricing.

"Tremendous changes have been made in Canada's milk marketing system since the mid-1990s to ensure that it conformed with international agreements," said Mr Fage. "It was very important to our dairy system that this case be won, and the national effort was commendable."

Last July a WTO compliance panel found that some of Canada's dairy exports were in violation of commitments made in the 1994 agreement. The final ruling by the appellate body reversed the decision, however. It ruled that the United States and New Zealand, who took the case to the WTO, failed to prove that Canada's approach to commercial milk is inconsistent with Canada's obligations.

Mr. Fage said he understands that the 44-page report is being characterized as a good starting point for international negotiators and that it raises issues that can now be dealt with properly within WTO agriculture negotiations.

Milk shipment returned $92 million to Nova Scotia farms in 2000. The value of dairy product shipments from processors was more than $275 million.