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US dairy subsidies a potential catastrophe

MEDIA RELEASE
WEBSITE WWW.FEDFARM.ORG.NZ

23 May 2009

US dairy subsidies a potential catastrophe

Federated Farmers is asking President Obama to come and explain to New Zealand’s subsidy-free farmers, why his administration has decided to subsidise 92,000 tonnes of American dairy products destined for international markets.

“I cannot express the anger I feel about today’s decision,” says Philip York, Federated Farmers economics and commerce spokesperson.

“The precedent this sets is actually worse than the European Union’s (EU) decision in January to go down the same path.

“Federated Farmers had respected American restraint from not retaliating against the EU. That has all been thrown away on the compost heap that is the US dairy lobby.

“The US dairy lobby is more interested in protecting subsidies than in exporting on free market principles. The fact President Obama caved into their demands is a genuine shock. I honestly thought the age of pork barrel politics had passed but I’m sadly mistaken.

“What’s worse is that this comes at a time when international prices for dairy commodities had started to stabilise.

“Now, from left field, comes this ludicrous decision which takes the world to the edge of trade anarchy.

“The World Trade Organisation needs to get to Washington and Brussels urgently to discuss this with the EU and the Obama administration. I know Don Nicolson, the President of Federated Farmers, will be raising this at next month’s meeting of the Cairns Group.

“This could easily set off a domino effect as smaller economies rush to follow the irresponsible ‘example’ being set by the EU and the United States. Tariffs and tit-for-tat trade barriers could depress international prices and trade volumes before spreading to other trade categories.

“The world is back to five minutes to midnight for an all out trade war and President Obama needs to get his hand off the trigger,” Mr York concluded.

ENDS

www.fedfarm.org.nz

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