Government denounces American extension of dairy export subsidies

Posted by Isobel Drake on 9th July 2009

The Federal Minister for Agriculture, Fisheries and Forestry, Tony Burke, has told of the government’s bitter disappointment with the United States’ decision this week to extend its dairy export subsidies by another year.Mr Burke is currently in Washington for three days to promote agricultural trade. He is due to meet US Trade Representative Ron Kirk today and Secretary of Agriculture Tom Vilsack tomorrow, with the US Dairy Export Incentive Program one of the key issues on Australia’s agenda for discussions during those meetings.

“Australia will continue to make sure the United States understands our strong objections to this decision and to call on the US to show better leadership on this issue,” Mr Burke explained. “As we said when the subsidy was first introduced, this undermines commitments made by G20 leaders not to impose protectionist measures. We warned it could trigger a landslide of retaliatory measures by other countries which will severely damage extensive efforts to promote free trade.”

“Protectionism has no place in a global community which faces unprecedented agricultural challenges such as climate change and a growing world food shortage,” he added.

World Bank President and former US Trade Representative Robert Zoellick has also criticised the reintroduction of dairy subsidies by the EU and the US, saying it will set the stage for ‘tit-for-tat’ protectionist policies.

Australian Dairy Farmers President Allan Burgess is a member of the industry delegation accompanying Mr Burke in Washington and echoed similar sentiments.

During an Australian-US industry roundtable chaired by Mr Burke, he outlined the great productivity gains achieved by Australian dairy farmers to become even more globally competitive, but said recent global trends have hit hard.

“Australian dairy farmers have been struggling with the global economic crisis and rising input costs,” Mr Burgess advised. “There is no place for inward-looking protectionism at a time when global jobs and the global food supply depend on free agricultural trade.

“After the US indicating they would try to avoid Australia’s key dairy export markets in south-east Asia, it was disappointing to see the reports this week about US products being dumped in these Asian markets.”

The dairy industry in Australia is also facing up to the prospect of prices for the remainder of the year being lower than the cost of production. Four of the largest milk processors last week announced cuts of up to 40 per cent, which could see many dairy farmers leave the industry.

“It just depends how long it stays down there for and I suppose this is the big question is how long it’s going to stay down for; is how long we can stand it,” Victorian farmer Graeme Prince told ABC radio. “There’s going to be a lot of farmers that’s gonna pull the pin; there’s no question.”