8 Jul 2013

Disappointment at US export subsidy increase

11:30 am on 8 July 2013

The dairy industry is disappointed at an American move to increase dairy export subsidies.

Dairy farmers in the United States pay a voluntary levy under the Cooperatives Working Together programme to support dairy processors who are exporting.

That's been doubled from 2c to 4c a hundredweight, to provide $US60 million extra for subsidising exports - a move that could reduce international dairy prices.

The Australian Dairy Industry Council is talking about taking a complaint to the World Trade Organisation.

New Zealand Dairy Companies Association chair Malcolm Bailey says officials here are also aware of the development, but no decision has been made yet about a New Zealand response.

"We would prefer that we were actually working with the Americans, the Australians and others in the TPP (Trans-Pacific Partnership) forum to actually get trade liberalisation," Mr Bailey says, "so we think it's a backward step to be subsidising exports in this way in the current environment."

Federated Farmers' dairy chair Willy Leferink says the increase is a misdirection of farmer levies which will hurt, rather than benefit, American farmers in the long term.