Several foreign subsidies for dairy production are making it harder for the U.S. dairy industry to be competitive overseas, the National Milk Producers Federation said in testimony before the House Agriculture Committee this week.
While the U.S. has reduced support mechanisms, NMPF said foreign dairy support programs impede an industry that has gone from exporting less than $1 billion in dairy products in 2000 to $7.1 billion last year.
"Trade agreements have helped make this possible by lowering and removing barriers to our exports," said Jaime Castaneda, NMPF's senior vice president. "However, they have done little to constrain the use of domestic supports in the dairy sector or agriculture as a whole."
Foreign dairy subsidies take different forms, ranging from direct aid, to import protections and regulatory measures designed to give foreign dairy producers an advantage over U.S. competitors, NMPF said.
According to Castaneda, the 28-nation European Union is the biggest provider of direct dairy support, offering cash payments, storage subsidies, price supports and, most recently, emergency aid to producers to counter low prices.
In addition, he said the EU is attempting to limit dairy imports further by blocking the use of commonly used product names outside prescribed areas.
For example, Castaneda said, an American producer of feta or parmesan cheese can no longer sell those products within the European Union, even though the names have been widely used for many years.
"What better way to impede or prevent imports of a given product than to ban the use of its name?" he said.
Castaneda said other major countries providing direct support to their dairy farmers include Canada, India, New Zealand, and Japan, among many others,
"While the United States has reduced its dairy subsidies and support mechanisms, other countries have maintained and expanded theirs," Castaneda said.