By Sam Fortescue

PROTECTION FOR EU dairy farmers is in the spotlight again, with Dairy UK urging EU negotiators to stick up for farmers at the World Trade Organisation talks on agriculture.

In a new booklet, director general Jim Begg has put the case for sticking to “meaningful tariff protection” in the EU and the prolongation of export refunds, which are used to sell the EU”s expensive dairy surplus on the world market.

“Without either of these two elements, the EU will not be able to manage its own internal price level. That”s why the EU must help ensure that any WTO agreement on agriculture is consistent with the operation of the dairy sector under the CAP. Anything less could throw the industry into chaos.”

The EU has been locked in talks with proponents of trade liberalisation in the WTO”s Doha Round for more than two years. It ran into trouble in 2003 when a block of developing countries demanded better access to protected markets in exchange for liberalising the market in services.

“The government is very much in the pro-liberalisation camp and is prepared to concede on agriculture to win on services,” said Peter Dawson, Dairy UK”s policy director.

“We have a CAP reform already which is yet to unfold and we don”t know what impact it will have on the dairy industry. We must allow it to unfold before embarking on a new round of reform.”

But the Global Dairy Alliance – which claims to represent 1.5m farmers in Argentina, Australia, Brazil, Chile, New Zealand and Uruguay – has issued a statement demanding immediate liberalisation.

“Fundamental market access reform remains central to a successful WTO round,” said GDA chairman Osvaldo Cappellini. “And real cuts in trade-distorting support must be delivered on a product-specific basis. We do not want to see the same old subsidies renamed so that they continue to damage world dairy markets.”

John Sumner at the Royal Association of British Dairy Farmers estimated that unfettered global competition would jeopardise up to 4bn litres of UK milk that goes into lower value products.

sam.fortescue@rbi.co.uk