Jamaican Dairy Farmers vs. European Dairy Farmers

The Jamaican Diary Farmers Federation claims EU subsidies mean Europe's farmers can produce milk at half of what it costs for Jamaican farmers.

Jamaican Dairy Farmers vs. European Dairy Farmers Host: The Jamaican Dairy Farmers Federation claims EU subsidies mean Europe’s farmer can produce milk at half what it costs Jamaican farmers. They say this is unfair, has made Jamaican milk uneconomic, and they accused the EU of dumping its excess milk products, but European farmers say that’s just market forces. Errol Ennis: It’s proved difficult for the Jamaican farmers - it meant that we couldn’t compete - and the industry was forced to rethink. Many farmers went out of business. Not an ideal situation. Jan Hesselink: Farmers in the Third World especially suffer from their backward position. When you see that they produce milk in a country where milk cannot be produced, that is like us trying to grow rice over here. They shouldn’t try but still they do, with cows that don’t even produce 700 liters a year, so how can you say that we are spoiling their milk? We have to ask ourselves whether it wouldn’t be better to produce in those places where it can be done most efficiently, in quantity and quality. They must be thankful that we produce to supply the demand. We sell milk, we don’t dump. Orel Rayson: I think it’s unfair for us because they get help and they can sell their product in our country for a cheap price and sell us out. They can have subsidy in Europe, they get subsidy there, we don’t have any and the biggest part of it, they get subsidy we should have gotten or they should have put a duty on the milk so that we have a level playing field. Our playing field is upside down, we keep going up the hill while the other country’s coming down. James Wolfensohn: We have in the world of six billion people, three billion people that live under $2.00 a day. European cows get subsidized to the extent of $2.50 a day, so there’s something disproportionate in terms of the way our subsidies are working and the way we’re attending to the question of poverty. Host: The European Union spends an estimated $16 billion a year subsidizing its dairy industry, selling its surplus on to countries like Jamaica. In a free market, the milk products imported by Jamaica are cheap and Jamaica still benefits from the 5% import duty which brings in around $3 million a year. But the result is that Jamaica’s own dairy industry is now fighting for survival. Orel Rayson: Come Tracy. This used to be the joy in my heart once but no more. Interviewer: But they are still good cows aren’t they? Orel Rayson: Yes, very good cows. Interviewer: Which is the best one? Orel Rayson: I used to have a best cow, well I don’t call them best cow anymore because I don’t get money, and they give me more some milk. I could call them all by name and when I call them one by one by the name, I know their name, they are so attached to me, I call their name and just walk out -- but I don’t call them good because they don’t make money… Bigga: This cow is a good cow, don’t give no problem. She gives enough milk. It’s many times dry, them hard to get feeding. Like when the rain starts, they will have a little more food, more grass. Orel Rayson: If you can’t feed a home, you’re infidel, not a good person. You need to come feed a home. All governments supposedly that they can feed themselves, if a war broke or a disaster, and things don’t come here, we need to feed ourselves because we’re hungry, I almost died. If anything can come here, we’re going to die, we must learn eat and drink what we grow. Host: In the 1980s, the Jamaican Government tried to help its farmers and dairy industry by imposing import duties in an attempt to protect its domestic market. Revenues from this were used to invest in the further development of the dairy industry. But that all changed when the government, in an attempt to boost Jamaica’s economy, applied for loans from the IMF. Professor Michael Witter represented the Jamaican Government in the negotiations with the IMF. Michael Witter: For a country like Jamaica to get a loan, it has to be in an agreement with the IMF. To get that loan you, have to sign certain conditionalities and those conditionalities invariably involved liberalization of the economy, to one degree or another. And as a part of that liberalization comes the removal of tariffs and the removal of special concessions to local producers. The philosophy behind that was this neoliberal notion that markets know best, and if we remove the protection, our producers would be made more competitive as a result of competition with external, more efficient producers. Interviewer; But competitive towards subsidised markets, how can it happen? Michael Witter: Well, that is what we protested, those of us who disagreed with the liberalization and I think it has remained an issue to the present day, the issue of the subsidies in Europe and the subsidies in the United States. So that in reality, we had to buy into what is called a “Level Playing Field Policy” when there was no level playing field. James Wolfensohn: We in the World Bank for a number of years were encouraging developing countries to open their markets on the basis that there was a deal done, that we would all open our markets. What's happened in recent years is that we are getting blamed, and I think in some cases correctly so, for encouraging developing countries to open their markets and then when they produce, they find it's difficult to sell in the developed country markets because they're blocked. So either we build barriers on both sides, in which case the developing countries should build their own barriers, or you should liberalize and have a free trade environment. I think everyone believes that a free market is probably in everyone's best interests. But what you cannot have is subsidies and tariffs on one side and freedom on the other because it just doesn't work.