Obama's Dairy Export Incentive Program 'un-American'

Federated Farmers is describing President Obama's Dairy Export Incentive Program (DEIP) as 'un-American'. DEIP is designed to target major New Zealand markets and is being driven by envy that sees uneconomic American farmers being propped up by struggling US taxpayers.

"Subsidies and tariffs is the trade equivalent of crack cocaine and America's farmers are hooked," says Lachlan McKenzie, Federated Farmers dairy chairman, in added response to President Obama's decision to bring the world closer to an all-out trade war.

"To show the challenge New Zealand now faces, the European Union's export subsidies, reintroduced in January, averaged $1,192 per metric ton on milk powder, $2,158 per metric ton on cheese and $3,873 per metric ton on butter between 2002 and 2004.

"Unsurprisingly, when those subsidies were lifted the export returns New Zealand farmers received picked up. Conversely, subsidies depress the prices we receive from international markets and with the EU and the US working as 'evil twins', the expected economic recovery will slow. In New Zealand, we depend on exports for our economic survival so these subsidies will affect the living standards and livelihoods of all New Zealanders.

"That's why President Obama's Dairy Export Incentive Program is underhanded, dangerous and dare I say it, un-American. It invites similar moves from Mexico City to Cairo and that's the danger. It's not the size of the subsidy but the way it will invite retaliation.

"Worse, DEIP specifically targets the same markets we export to without subsidy.

"It's galling America's compost heap of a dairy lobby blame New Zealand's subsidy-free because we are so efficient. What ever happened to the free market?

"I'm surprised President Obama is backing inefficient American farmers. Subsidies hit poor American families especially hard. American families pay on average around US$322 extra per year at the checkout just to keep American farmers in the latest pickup truck.

"It's no surprise then that a majority of Americans want these subsidies abolished.

"If the US wishes to balance its budget, it could start by abolishing its Foreign Agricultural Service and making its farmers live in the real world. The United States Foreign Agricultural Service spends nearly one-quarter of New Zealand's total gross domestic product, or around $30 billion, supporting American farmers.

"Blaming New Zealand for being efficient or the European Union 'as they started it', highlights why two wrongs don't make a right.

"Federated Farmers will be asking the United State's Embassy's chargé d'affaires for a 'please explain' and our president, Don Nicolson, will be pushing this hard at the Cairns Group meeting in Indonesia next month," Mr McKenzie concluded.