US farmer-funded dairy body, Cooperatives Working Together (CWT) has announced a 50 percent increase in its export subsidy program and is said to be targeting the Australian and Japanese markets.
The funding from the CWT body is estimated to increase to a total of $60 m annually to subsidise export markets as reported by the Weekly Times Now.
Noel Campbell, chairman of the Australian Dairy Industry Council (ADIC) said the subsidies will create an uneven playing field.
"It is disappointing that American milk producers feel the need to subsidise their dairy product exports and will not compete on a level playing field,'' Campbell said.
"The CWT subsidies program is targeting key Australian markets in Asia, such as Japan, and under-cutting efficiently-produced Australian product in these markets.''
"Activity of this type only reinforces the need for Australia to sign key Free Trade Agreements such as those being negotiated with Japan, China and Korea to assist in ensuring a more level playing field."
CWT’s export subsidies program allegedly takes a levy drawn from approximately two thirds of total US milk production, which is then used to subsidise product entry into export markets.
According to the Australian Dairy Industry Council, CWT is not aligned with the US government which enables the body to ‘side-step’ existing World Trade Organisation rules and restrictions.
Dairy Australia and the Australian Dairy Industry Council are said to be investigating legal options in light of the announcement, and will be working with industry and government to ensure the protection of the Australian dairy industry.