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Foreign Dairy Subsidies Still Limit U.S. Export Potential, NMPF Tells House Panel

November 6, 2015

While the United States has reduced support mechanisms for dairy farmers in recent years, a wide range of foreign dairy subsidies remain, limiting the U.S. industry’s ability to sell more of its products overseas, NMPF Senior Vice President Jaime Castaneda told the House Agriculture Committee.

Testifying October 21, Castaneda said these 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.

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, the EU is attempting to limit dairy imports further by blocking the use of commonly used product names outside prescribed areas.

Other major countries providing direct support to their dairy farmers include Canada, India, New Zealand, and Japan, Castaneda said.