Dairy Reform Must Be Central To Wto Outcome

Dairy Reform Must Be Central To Wto Outcome, Says Global Dairy Alliance

Reform of world dairy trade must be a central part of the outcome on agriculture in the WTO Doha Development Round. This was the message of the Global Dairy Alliance which paid a visit to key European capitals last week.

Formed late last year, the Global Dairy Alliance brings together the private dairy sectors, including both farmers and processors, of six unsubsidised dairy exporting nations: Argentina, Australia, Brazil, Chile, New Zealand and Uruguay. Together they represent over one million farmers and 60 billion litres of milk.

Former WTO Director-General Mike Moore, who accompanied the group on its visit to Geneva, Brussels, Paris and Berlin this week, said the group had two main messages:

"First, there can be no WTO outcome without agriculture, and there can be no outcome on agriculture without dairy.

"Second, global dairy reform would bring major benefits worldwide to all dairy producers and consumers in the sector, not just nations represented in the Alliance."

Analysis produced by the group shows that substantial reform through the elimination of export subsidies and market access improvements would bring US$11 billion of benefits to Alliance members, and an additional $8 billion to other developing countries outside the Alliance. In Argentina alone, it would be worth $2.3 billion, equivalent to twice the annual budget of the income support program for poor families.

The Alliance analysis also shows that reform of the EU dairy market based on the Cairns Group proposals in the WTO negotiations will be cheaper and less painful for the EU than the reforms currently proposed by the EU Commission.

Substantial market access improvements and the elimination of export subsidies would have the effect of raising world prices on a sustainable basis for all. This will benefit dairy producers in developing countries and would mean that EU prices will not need to fall by the drastic 25% proposed by the Commission. The savings to the EU dairy industry in comparison with the Commission proposals are calculated at $4 billion.

The Alliance is concerned that the proposals contained in the current 'Harbinson draft' modalities paper do not go nearly far enough in ensuring that real trade benefits will flow, and are insufficient to capture the potential benefits that their analysis shows would be achieved by more ambitious reform.

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