VANCOUVER – The world’s dairy farmers are divided over what the industry needs, or can accept, from negotiations at World Trade Organization talks, which wrapped up an opening session in Seattle, Wash., last week.
Even though the talks broke off without a framework for future negotiations, trading countries vowed to keep trying. That keeps the pressure on Canada to maintain existing tariff protections, legislated domestic support and trade restrictions.
“As a Canadian milk producer, I prefer a supply management system,” Dairy Farmers of Canada president John Core told a weekend meeting of world dairy farmers Nov. 28. “I do not believe that a so-called free market system will be in the best interest of my farm.”
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Pitted against him were the major dairy exporters New Zealand and Australia, who gave notice that Canada’s insistence on protection will be challenged. Canada’s Cairns Group allies on ending grain subsidies are adversaries in the dairy talks.
“Preserving special domestic arrangements looks unsustainable in a world where trade barriers are reducing and many countries aspire to raising their dairy exports,” said New Zealand trade ambassador Malcolm Bailey. “When we look at the global picture, the policies to raise dairy prices look self-defeating.”
A divide between protectionists and free traders was on display two weeks ago when representatives of 26 countries met to discuss dairy issues and the WTO talks.
European Union dairy farmers rejected the call, supported by Canada, for an end to export subsidies in dairy products. Export subsidies in Europe are tied to domestic supports and production controls.
“If that system is changed, the result will be an end to production controls and an increase in production,” said French dairy farmer president Jean-Michel Lemetayer. “That would lower prices, not raise them.”
Third World delegates complained that high levels of protection and subsidy in developed countries hurt their industries because cheap powdered milk is dumped as trade or aid.
The conflicting visions were played out behind predictions that inevitable trade liberalization will reduce the ability of governments to support their dairy farmers.
European delegates said the trend inside the EU is to reduce government regulation and price. It is not a question of whether protections and controls fall, but how quickly.
For Canadian dairy farmer Jean Nobert, it was a frustrating sign that governments are no longer as susceptible to farmer arguments about the need for support from the power of traders, retailers or processors.
“We have a WTO making rules that override the legislative policy of sovereign states,” he said. “Now producers have a new threat to their weapons of choice in the struggle for market power equivalence. Our actions must be judged by the god of trade.”
