Tuesday, October 09, 2012

Sour capitalism

Mauritania is flooded with cheap milk products imported from Europe. Sixty percent of the population depends on the livestock sector in some form for income, and the sector contributes almost eight percent to the country's GDP, yet the country imports 65 percent of its milk requirements.  European milk products continue to stifle domestic dairies. Between 30 and 40 percent of locally produced milk in West Africa is wasted or lost because pastoralists do not have the knowledge or the capacity to process their surplus, pointed out Anthony Bennett, a dairy expert at FAO.

Poor producers in Mauritania are unable compete with the heavily subsidized milk sector in developed countries in Europe and elsewhere, the UN Food and Agriculture Organization (FAO) noted it is report Why has Africa Become a Net Food Importer? Between 1986 and 2007, industrialized countries provided at least $20 billion worth of support to their milk sectors, the report noted.

Across West Africa, customs duties are low, and "local farmers are squeezed out of the dairy value chain by subsidized European milk powder," said Concord, the European NGO Confederation for Relief and Development, in its 2011 report. "Regional production is therefore unable to meet domestic market demands. In Burkina Faso, nearly one out of every two litres of milk consumed in the country was imported in 2006, and in urban areas the figure was as high as 9/10 litres. European subsidized milk powder accounted for half of the cheap imports. Today, unfair market conditions continue to undermine local milk production," the report noted. The European Commission, in an effort to mitigate the impact of its subsidies, in 1984 introduced a quota on the amount of milk that it could produce, which would inhibit dumping surpluses in developing countries’ markets. The Commission also banned export subsidies for dairy farmers in 2008. However, in 2009, when production slumped and milk prices hit a record high, it reintroduced export subsidies for dairy farmers, and its quota arrangement is expected to be eliminated in 2015. "Combined with the EU’s current practice and further market-orientation of the sector, the external impacts of the EU’s milk policy may even worsen," said the Concord report.

From here

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