OTTAWA, ON, Nov. 28, 2020/CNW/ - Today, the Honourable Marie-Claude Bibeau, Minister of Agriculture and Agri-Food, announced a substantial package that delivers on the Government of Canada's commitment to full and fair compensation for the market access concessions made under the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Canada's supply-managed dairy, poultry and egg farmers are part of the backbone of the Canadian agriculture sector and the Canadian economy. They continue delivering the best quality products to the kitchen tables of Canadians, despite challenges presented by the COVID-19 pandemic. The strength of Canada's supply management sector is essential to the vitality of our family farms and rural regions from across Canada.
In August 2019, Minister Bibeau announced that $1.75 billion would be provided to compensate Canadian dairy farmers over 8 years. Between December 2019 and January 2020, more than 10,000 dairy farmers received a cash payment of $345 million. Today, the Government has set a schedule to deliver the remaining $1.405 billion through direct payments to farmers over a timeline of only three years.
Dairy farmers will receive, on the basis of their milk quota, cash payments of $468 million in 2020-21, $469 million in 2021-22 and $468 million in 2022-23. The owner of a farm with 80 dairy cows will be awarded compensation in the form of a direct payment of approximately $38,000 each year. These amounts also build on the $250 million CETA on-farm investment program, and provide certainty on the schedule and form of remaining payments in the $2 billion total compensation package for dairy farmers.
The Government is also announcing $691 million for 10-year programs for Canada's 4,800 chicken, egg, broiler hatching egg, and turkey farmers. Responding to sector demands, these programs will drive innovation and growth for farmers. Program details will be designed in consultation with sector representatives and launched as soon as possible.
Furthermore, the Government of Canada remains committed to engaging the sector on full and fair compensation for the Canada-United States-Mexico Agreement (CUSMA), and to processors of supply managed products.
"Our Government is fully behind our supply management sector, which supports our family farms and the vitality of our rural areas. Today's announcement of a substantial compensation package for our dairy, poultry and egg farmers shows our support for a strong supply management sector for many generations to come." - The Honourable Marie-Claude Bibeau, Minister of Agriculture and Agri Food
"The level of certainty provided by this announcement enables us to be in a better position in terms of innovations and efficiencies to better compete with increase imports of dairy products made from foreign milk."- Pierre Lampron, President, Dairy Farmers of Canada
"Canada's 2,877 chicken farmers appreciate the announcement today on mitigation measures stemming from the CPTPP. Farmers have waited a long time to see action on this file, and we believe that this is a step in the right direction. We look forward to continuing our work on the investment and market development programs for our sector." - Benoît Fontaine, Chair, Chicken Farmers of Canada
"Hatching egg producers have suffered significant losses due to recent trade agreements and we are pleased that the federal government finally recognizes the significant challenges posed to our farmers by CPTPP. We will continue to work closely with the federal government to develop policies that mitigate the impacts of the CPTPP and CUSMA"- Brian Bilkes, Chair, Canadian Hatching Egg Producers
"Turkey Farmers of Canada appreciates the announcement of mitigation funding required as a result of the CPTPP agreement. The access granted to our domestic market poses significant losses to Canadian turkey farmers. This funding will be used towards market development programs and for farmers to reinvest in their operations. We remain committed to continued work with the government and continued progress on this file." - Darren Ference, Chair, Turkey Farmers of Canada
"With today's announcement, the government has taken a positive step in supporting Canada's egg farmers. This investment in our sector will provide new opportunities for our farmers to reinvest in their operations and plan for the future as they navigate the market losses as a result of the CPTPP agreement. We appreciate the government's continued and vocal support for supply management, and look forward to the continuation of this commitment moving forward." - Roger Pelissero, Chair of Egg Farmers of Canada
The Government of Canada has maintained the three pillars of Canada's supply management system for dairy, poultry and eggs — production control, pricing mechanisms, and import control.
During negotiations for the Canada-United States-Mexico Agreement (CUSMA), the Government defended supply management from American efforts to dismantle it. In the recently concluded agreement with the U.K., the Government defended Canada's supply management system, and will continue to do so in future discussions with the U.K. The Government has been clear that there will be no more concessions on supply management in future trade negotiations.
In 2019, there were 10,371 dairy farms in Canada, supporting close to 19,000 direct jobs on farms.
There are over 4,000 producers of chicken, broiler hatching eggs, turkey, and eggs in Canada. The four supply managed poultry and egg sectors (chicken, broiler hatching eggs, turkey, and eggs) generated over $4.9 billion in farm cash receipts in 2019, 7.4 percent of all farm cash receipts in Canada. According to industry, Canada's poultry and egg sector supports more than 140,000 direct and indirect jobs.
Because of the downturn of the restaurant and food service industry during the COVID-19 pandemic, the Government of Canada helped dairy farmers deal with the resulting surpluses of products like cream, by increasing the borrowing capacity of the Canadian Dairy Commission by $200 million. This gives the Commission added capacity to purchase excess perishable products like cream and convert them into longer lived ones like cheese in order support producers and reduce food waste during market disruptions.
Once fully phased-in, concessions made under three trade deals (the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the CUSMA), as well as World Trade Organization commitments, are estimated to be equivalent to approximately 10 percent of Canada's current milk production.
The demand for Canadian dairy remains strong, and has grown by almost six percent over the past 10 years.
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SOURCE Agriculture and Agri-Food Canada
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NEW YORK, Nov. 3, 2020 /PRNewswire/ -- The impact of the US elections on commodities remains uncertain, in that a re-election of President Donald Trump would likely mean a continuation of easing regulatory constraints on the oil and natural gas industries, while a Joe Biden election victory would most likely increase regulation and encourage growth in renewables, according to the Platts Analytics US Election analysis released by S&P Global Platts ("Platts"), the leading independent provider of information and benchmark prices for the commodities and energy markets.
However, in the short term it will be the likelihood of stronger economic growth and a more positive outlook on global trade under a Biden administration that could lend support to energy prices. But under such a scenario, offsets could include the potential return to the negotiating table on the Iranian nuclear deal and growing humanitarian issues in Venezuela, with any early return of oil supply from either country weighing heavily on energy prices.
An Election win by either candidate points to large rollback of agriculture sector subsidies.
Political polls overwhelmingly tilt towards a Biden victory, along with Republicans losing their majority in the US Senate. In the US House of Representatives, the Democrats are expected to extend their majority by perhaps six seats. Despite the overwhelming poll data, S&P Global Platts Analytics still believes there remains a large degree of uncertainty regarding the outcomes. Below find a brief look at some of the implications of the outcome of the US Elections:
If a Trump Re-Election:
Under Trump we can expect a continuation of Trump's trademark style of one-off transactional diplomacy, treating allies and adversaries no differently, while Biden would look to heal relationships and strengthen trade partnerships. Significant progress has been made in the Phase 1 China-US trade deal despite the 2020 commitments not being met (with agricultural goods ramping up) in part amidst weaker prices. The shortfalls in purchases are expected to be rolled over into the 2021 commitments supporting energy and agricultural commodities.
Under Trump energy policy is likely to remain supportive of the energy industry, encouraging US exports and loosening regulatory constraints, while Biden will pursue Obama-era policies, with tighter regulation on pipeline, flaring and fracking especially on federal lands.
If a Biden Victory:
Under Biden we expect faster economic growth, higher employment, acceleration of inflation, a weaker dollar, and smaller deficit supported by the assumption of a greater degree of stimulus to support growth, less restrictive assumptions on immigration, stronger healthcare programs, and support for a higher minimum wage.
Tax policies and perceived subsidies to the energy industry could come under renewed scrutiny under Biden. Provisions such as the master limited partnership structure, depletion allowance, intangible drilling costs, and section 199 domestic manufacturing deduction could be reduced. Such actions, along with still weak energy prices for both oil, gas, and coal, would further hinder the recovery path for the energy industry.
Under Biden the renewables industry will see a more favorable environment and a return to the Paris Accord commitments, which will accelerate investment in solar wind and storage, impacting fossil fuel demand in thermal power generation.
SEE SIDE-BY-SIDE OUTLOOK COMPARISONS
US Foreign Policy – Energy impact
Likely to focus immediately on repairing relationships with allies and bringing them onboard on various foreign policy initiatives including Iran, Venezuela, China, and Russia. A return of Iranian barrels is more likely under Biden, although we do not expect a meaningful return before 2022.
Exports of LNG and crude will be pushed as a trade balancing mechanism in Asia and Europe.
Multilateral approach to trade and other global partnerships, with less friction with a host of key trading partners (Latin America, EU, China).
Subsidies and tax changes will be deployed to promote fossil fuel development; and
Regulatory focus will tighten and favor oil and gas majors over independents, given additional costs involved in limiting flaring and venting from both fields and pipelines.
Remaining federal incentives to promote renewables will be cut back or eliminated altogether.
Policy will shift towards additional deployments of renewables and batteries at the expense of fossil fuels in power generation.
The near-term impact on US oil and gas supply is largely limited regardless of election result, as significant permits and drilled but uncompleted wells, or DUCs, provide a cushion in the event of a ban on new federal drilling permits.
Drilling on federals lands will be reviewed along with current oil and gas tax provisions, with rollback of Obama-era methane regulations, or even the implementation of tighter regulations on existing, not just new, (stripper) wells.
A second Trump administration is likely to maintain the status quo in terms of oil and gas tax provisions, so as not to create further headwinds for an industry already struggling from weak commodity prices.
Near-term impact on US oil and gas supply is largely limited regardless of the election result, as significant permits and DUCs provide a cushion in the event of a ban on new federal drilling permits.
A return of Iranian barrels is not out of the realm of possibility but risks of missteps and tensions in the Middle East are heightened.
Increased underlying cost of US natural gas (and therefore raising the cost of US LNG) through a number of likely executive orders, which would be aimed at lowering methane emissions and banning new oil and gas leasing on public lands.
Reduced risks that federal regulations will start to assess full life-cycle costs, which would include upstream carbon emissions and methane leakage associated with new LNG export projects.
Risk of additional trade tensions with key Asian demand countries, namely China, which could impact ethane, LPG, ethylene and polyethylene trade.
Midstream sector investment moves toward CO2, H2, but construction would likely occur after the upcoming term. US ethylene cracker investment Wave 3 would be at risk.
Wave 3 of US ethylene units would likely proceed. Thus, anticipate no change to potential relaxation of regulations on single-use plastics and recycling.
Single-use plastics and recycling would move to the fore, with potential for more regulations on single-use plastics and encouraging of recycling.
Renewables & Climate
The opportunity to defend reversals of Obama policies in court.
Re-engagement with Paris Climate Accord. However, comprehensive climate proposals (including targeting decarbonized power sector by 2035) depend on US Senate makeup and the relative importance of other (non-energy) policy priorities.
Likely means imposed Section 201 tariffs on imported solar module tariffs in 2018, as well as work to extend and even increase the magnitude of those tariffs.
Work to reverse the Trump administration's rollback of Obama-era regulations (Congressional Review Act could give quick wins). The EPA would approve California waiver, allowing it to set tougher-than-federal clean air standards -- which other states can then follow to set vehicle policy.
Continued slow-walking of offshore wind permitting; potential use of CFIUS rules to block offshore wind deals involving foreign state-owned companies (Equinor, Orsted, etc.)
The extension of Wind Production Tax Credit and Solar Investment Tax Credit, continued support of CCUS-- which have historically been bipartisan.
About S&P Global PlattsAt S&P Global Platts, we provide the insights; you make better informed trading and business decisions with confidence. We're the leading independent provider of information and benchmark prices for the commodities and energy markets. Customers in over 150 countries look to our expertise in news, pricing and analytics to deliver greater transparency and efficiency to markets. S&P Global Platts coverage includes oil and gas, power, petrochemicals, metals, agriculture and shipping.
S&P Global Platts is a division of S&P Global (NYSE: SPGI), which provides essential intelligence for companies, governments and individuals to make decisions with confidence. For more information, visit https://spglobal.com/platts.
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SOURCE S&P Global Platts