Dairy farmers in India have criticised the recently passed US Farm Bill 2002, saying it will further deflate international dairy prices while upping subsidies and protection for farmers in advanced countries who are inefficient and operate at too high a cost.

India is not the only country to have expressed disapproval of the Bill, which provides for continuation of the existing Milk Price Support Programme. Under this scheme, the USDA’s Commodity Credit Corporation is committed to buy unlimited quantities of butter, cheese and non-fat dry milk (i.e. skimmed milk powder) from dairy plants that prices that enable them to pay a minimum support price for the milk supplied by farmers.

The Farm Bill also provides for a National Dairy Market Loss Payments scheme to further assist milk producers, outraging Indian farmers such as Deepak Jain, director of Dynamix Dairy Industries Ltd, who said: “There is absolutely no basis for guaranteeing such high levels of milk prices, that too for producers who are said to be more efficient than our farmers.”

According to the Hindu Business Line, Jain feels the continuation of the price support programme, along with the new counter-cyclical direct payments scheme against a target price, will provoke the European Union to follow suit and provide higher levels of support to its dairy farmers.

“All these will only increase subsidies and further distort world trade in dairy products, making it harder for our industry to compete,” Jain added.