The Canadian government is set to spend C$1.75bn ($1.32bn) over eight years to assist dairy farmers facing competition as a result of free trade deals.

Through this initiative, the government aims to financially back dairy farmers who have been affected by the free trade pacts that the country entered with European Union (EU) and Pacific nations.

The pacts signed by the government include the Comprehensive Economic and Trade Agreement (CETA), the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP) and the Canada-USA-Mexico Agreement (CUSMA).

These agreements have enabled farmers from other countries to export the milk produced in their country into the Canadian market.

Initially, the government will pay C$345m ($260m) directly to the dairy farmers in the first year, based on the production quotas of the farmer.

Welcoming the announcement, Dairy Farmers of Canada (DFC) said that the aid would help farmers in mitigating the impact created by the pact.

According to DFC’s estimate, the market access granted under these agreements represents an annual loss of 8.4% to the milk produced in Canada.

DFC president Pierre Lampron said: “There is no doubt that conceding part of our domestic dairy market has had a major impact on the livelihoods of dairy producers.

“Prime Minister Trudeau recognised this and committed to mitigating this impact. We welcome today’s announcement as a continuation of this commitment.

“The Prime Minister has made another commitment: no further concessions would be made to our domestic dairy market in future trade negotiations. Our expectation is that he will keep that commitment as well.”