Representatives of the Indian dairy industry have called on the government to request WTO action against the US following its recently passed Farm Bill, which many farmers around the world believe unfairly protects the US dairy sector from fair competition.
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The Farm Bill allows for continued support for the existing Milk Price Support Programme (MPSP). This commits the USDA’s Commodity Credit Corporate to buy unlimited quantities of butter, cheese and skimmed milk powder (non-fat dry milk) from dairy plants at prices that enable them to pay a minimum support price for the milk supplied by farmers.
Although the MPSP was due to finish at the end of 1999, it has been extended.
The Indian dairy industry feels this violates “the spirit and the principle of the constitution of the WTO”. Indian Dairy Association (IDA) president Animesh Banerjee commented: “The US move, far from helping to reduce trade distorting subsidies, would unleash a fresh wave of subsidies by competing countries. It would undermine US credibility in asking the EU and others to bring down agricultural subsidies.”
The IDA has sent to a memo to the Union agriculture minister Ajit Singh, saying: “While the developed dairying nations have been continuously providing different forms of subsidies to protect the interest of their milk producers, in contrast we, in India, expose our milk producers to a stiffer competition by agreeing to reduce the tariff from the levels of 100% in the year 1995 to 40% in 2005.”
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