This industry is the most heavily subsidized in Canada according to the Sept. 2004 Farm Income Data Book published by Agriculture and Agri-food Canada, which notes that "the Dairy Industry continues to enjoy the highest level of (consumer/taxpayer) support in Canada, accounting for over one-third of the total Producer Support and two-thirds of the market support."

The report echoes the findings of the International Dairy Federation (IDF) and the Organization for Economic Cooperation and Development (OECD), which state that wholesale Canadian dairy prices are up to 155% higher than world price, and Canadian consumers provide subsidies of more than $2.5 billion annually to dairy producers in the form of higher than world prices.

"This means that Canadian consumers pay a hidden tax of $178 per household per year, collected every time consumers buy milk, cheese, yogurt, butter, ice cream or other dairy products," says Fruitman. "What is really offensive is this hidden tax is not aiding the hard-working, financially strapped small farmer but is subsidizing dairy farms that have an average net worth of $1.6 million, more than twice the average for all farms."

In a meeting with the Canadian Dairy Commission tomorrow, the Consumers' Association of Canada will call for a freeze on dairy prices to provide relief to consumers and to encourage them to buy more dairy products.

"There is absolutely no justification for any price increases since the CDC's own figures show a decline in the cost-of-production even though they are using a formula which we feel skews the numbers in favour of the industry," says Fruitman.

"If the Industry were to receive any compensation for BSE-related losses, as the dairy producers are demanding, this should be done as a direct one-time payment from the appropriate governments and should not be reflected in the on-going price of the products."

The CDC is the Crown corporation that determines dairy prices in Canada based on cost of production, and has no authority to award BSE compensation.

The Consumers' Association of Canada, a national consumer organization for almost 60 years, informs and educates consumers, and advocates on their behalf to improve quality of life. The organization works with government, business, and industry to develop standards and legislation to protect consumers in the marketplace.

For more information, contact:

Mr. Bruce Cran, CAC President
Telephone: (613) 291-7999

Mr. Mel Fruitman, CAC VP
Telephone: (905) 832-9969