Policy Schemes and Trade in Dairy Products | Agricultural Policy Schemes: Other Systems

Abstract

Many government dairy policies lay dormant during the spell of high international dairy prices, but after the prices fell dramatically in 2009, the interventions were often brought back to life together with the political debate on the need to continue the support to milk producers. However, not everywhere milk producers benefit from governmental interventions, and where dairy policy schemes exist they differ substantially across countries. This article illustrates the very different approaches to intervention on the dairy market and reviews the current dairy policies in Canada, Japan, Australia, and New Zealand. The review also considers historical background and signals potential challenges. The comparison of government support to milk producers across the reviewed countries is aided by measures of producer support estimate (PSE) and single commodity transfers (SCT) as calculated by the OECD. The experience of Australia and New Zealand shows that governments’ intervention on dairy markets is neither a necessary nor a sufficient condition for a prosperous milk production sector.