The European Union decision to resume export subsidies on butter, cheese and milk powder which were suspended a couple of years ago is a blow to free trade hopes and our dairy industry.
The world milk price has fallen steeply in recent months, the EU is already subsidising butter storeage and the new subsidies will encourage further supply which is unrelated to demand.
Trade Minister Tim Groser and Agriculture Minister David Carter say it’s a negative signal when so much effort is going in to reducing protection.
Groser said this makes completion of DOHA negotiations even more urgent and Dear John says the prohibition of these subsidies should be the number one goal of current WTO negotiations.
New Zealand farmers were brought kicking and screaming into producing without subsidies in the 1980s. The pain at the time was intense but farmers are more efficient and more secure now than we ever could be with subsidies.
This message has still to get through to producers, manufacturers and politicians in other parts of the world and everyone is paying the price of unsustainable production because of that.