Indian dairy farmers’ woes may increase as India opens market for American dairy products

Jan 16, 2018

India has opened its markets for American dairy products—an invitation for aged, made-in-United-States cheese to flood the market. These cheeses will be cheaper than what are available now, potentially affecting domestic dairy producers. For consumers, this will mean cheaper but less nutritious products. Of course, for the US dairy sector this is welcome news.

Depressed international prices, rising cost of production and the trade wars with China and Mexico have led to an overwhelming increase in the reserves of US cheese.

China and Mexico—among the largest consumers of US dairy products—have increased tariffs on the same by 20 per cent and 28 per cent respectively. This trade war has hit US farmers and led to a significant reduction in export of cheese.

According to dairy consulting firm CLAL, the stockpile of US cheese stored in cold-storage and warehouses, was 1.4 billion pounds last year. This is the biggest stockpile of cheese in more than a century. Cheese has low shelf-life, and its quality starts declining if it’s stored for over a few weeks—leading to depreciation in both price and quality of the product.

Dairy markets have been suffering depression in prices since 2015 due to glut in the international dairy market. Millions of small and marginal farmers across the globe have gradually been pushed out of the dairy market.

In the US alone, thousands of dairy farmers have left the business due to loss. President Donald Trump has supported dairy farmers after they voted him to power in the 2016 presidential election. Hence, to maintain the support and to dump excess products, the Trump administration pressured the Indian government to open up its markets.

India opened its market for US dairy products in December, 2018. This move is going to hurt India’s 73 million small and marginal dairy farmers.

Devinder Sharma, agriculture and policy analyst, criticised the government’s move and said that this will further induce an agrarian crisis in India. Another reason behind the increasing stockpile of cheese in the US is the change in taste and eating habits. There has been a significant reduction in consumption of cheese in the last one decade.

Against sale of other forms of cheese, sale of Mozzarela—primarily used in preparation of pizzas—has shot up. Mozzarella is traditionally a southern Italian cheese made from Italian buffalo’s milk.





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