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Milking the System

What is it with milk? Unlike other free-market beverages, milk is produced in most jurisdictions in Canada under quota systems that protect dairy farmers from foreign competition, yet practically doub...


What is it with milk? Unlike other free-market beverages, milk is produced in most jurisdictions in Canada under quota systems that protect dairy farmers from foreign competition, yet practically double milk’s cost to consumers — a particular hardship for the poor whose groceries represent a large percentage of household expenditures.

The special treatment extends to milk packaging. A plethora of stewardship programs across the country use top-up fees and other mechanisms to help offset the net cost of recycling milk containers through municipal curbside programs. (See “No Use Crying Over Spilt Milk,” February/March 2003 edition.) These create the impression that milk producers pay their fair share to manage their wastes. In truth, the programs allow industry to avoid more effective deposit-refund programs, and they cost municipal taxpayers a bundle.

The best illustration of the problem with such subsidies comes, ironically, from British Columbia — the birthplace of North American deposit-refund systems for beverage containers.

BC’s deposit-refund system is among the most effective product stewardship programs in Canada, attaining diversion rates above 90 per cent for some containers — much higher than curbside systems that divert only about a third of the beverage container waste stream.

When BC expanded its deposit-refund system in 1998 to include juice, liquor and wine containers, the BC Dairy Council lobbied for and received an exemption. As a result, its high-density polyethylene (HDPE) milk jugs and polycoat cartons are still collected by local governments, most of the latter going to landfill.

The list of organizations that seek to have milk containers placed on deposit includes the Recycling Council of BC, the Union of BC Municipalities, and the Regional Districts for the Capital, Greater Vancouver, Kootenay Boundary, Fraser Valley and Nanaimo, among others. And the public likes the idea. Two years ago, the Southern Gulf Islands Recycling Coalition (SGIRC) assembled a petition with more than 20,000 signatures from 21 of the province’s 27 regional districts.

Aware of the outcry, BC’s Ministry of Water, Land and Air Protection asked the BC Dairy Council to provide stewardship options or possibly face inclusion in the deposit system. With funds from Encorp Pacific, the Dairy Council sponsored a one year pilot project in Abbotsford/Mission (population 35,000) that collected milk packaging in the city’s blue bag program. About 83 per cent of plastic milk jugs and 27 per cent of polycoat containers were captured. The Dairy Council then circulated a proposal to various municipalities offering a “top-up fee” based on the market value of the containers.

Staff at the Regional District of Nanaimo used data from the Abbotsford/Mission pilot project to evaluate the true value of the Dairy Council’s proposed top-up, extrapolated to the entire region. They determined that a Nanaimo curbside program would collect about 42 tonnes of plastic jugs and 19 tonnes of polycoat containers, resulting in an annual top-up of roughly $8,600. Figuring in extra collection, processing and administrative costs and then subtracting the top-up fee, Nanaimo staff estimated the subsidy would result in a net benefit of $2,400 per year or about 11 cents per household serviced.

Sounds good.

But then staff considered volume, not just weight. HDPE milk containers are a lightweight, high-volume material. Nanaimo staff determined that on average milk containers consume approximately 30 per cent of the space of the recyclables collection trucks, and represent about a third of the region’s half-million-dollar annual costs associated with recyclables collection, administration and public education, or about $153,000. Therefore, staff concluded, the Dairy Council’s proposed top-up fees take responsibility for less than six per cent of the true costs of recycling milk packaging waste. Add in attached administrative overhead for the region and its contractors, and the net benefit to Nanaimo would be less than two per cent of the cost of handling milk containers.

Not surprisingly, Nanaimo rejected the Dairy Council’s proposal and joined other regional governments calling for milk container deposits. In their report to council, Nanaimo staff wrote that a deposit-refund system would “encourage private sector innovation in the handling of the milk containers and in the design of the product packaging towards more recyclability…. Costs of the system would likely be far less than the current curbside collection costs and would be correctly borne by the producer and consumer.”

In February, 2003, BC’s environment ministry released a discussion paper entitled “Product Stewardship Regulation Review” and initiated stakeholder consultations toward a new Extended Producer Responsibility regulation, expected this spring. (See Legal Brief column, page 14). The ministry has indicated it plans to include an industry stewardship program for electronics and specific performance targets for all product types. Yet milk containers will apparently still be exempt from deposit-refund.

Sadly, BC is missing an opportunity to lead the country on this issue. One can only hope policymakers across the country will read the Nanaimo staff report and learn from its clear conclusions. (It’s available under the “Posted Documents” button at www.solidwastemag.com) And I haven’t even mentioned the potential of a deposit-refund system for refillable milk containers made from unbreakable space-age Lexan resin. Refilling is more energy efficient and environmentally sound than recycling, and a deposit-refund system for such containers could protect local milk producers from U.S. factory-scale operations when the country’s milk production quota system inevitably fails more challenges before international trade tribunals. Deposits and refillables have already done this for Canadian beer; milk producers will lobby for a similar system once it’s in their commercial interest.

Email Guy at gcrittenden@solidwastemag.com


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1 Comment » for Milking the System
  1. Monty Bruce says:

    I would prefer to see incentives to purchasing local foods. This is likely counter to NAFTA.

    For milk containers:

    1. We need a lobby mechanism for public opinion.
    2. I support a non-refundable fee somewhat proportional to environmental impact. That could mean higher fees for cartons than for refillable milk containers.
    3. I support a refundable deposit fee for all milk containers based on evidence that a refundable deposit fee tends to increase container returns.

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