Farm commissioner Mariann Fischer Boel has reiterated the EU's commitment to phase out all export subsidies by 2013, but in the meantime has insisted on their use to defend EU market share. Responding to concerns that the dairy export refunds, reintroduced in January, mean 'dumping' cheap produce on developing countries, Fischer Boel said that the EU cannot risk losing its market share to other major exporters.
The return of the subsidies has been widely criticised by agricultural exporting countries such as Australia. But concern has also been expressed within the EU itself. Germany is known to have been concerned that the subsidies are creating a damaging dumping effect in some developing countries.
Fischer Boel explained that in countries such as the Dominican Republic, the impact of subsidised EU exports is not to directly harm domestic produce. These markets are in fact a battleground between the EU and other developed world exporters, she argued.
Of course the EU is not directly competing on the liquid milk market in these countries. However, I recall reading studies by Oxfam and Cafod relating to the Dominican Republic and Jamaica. Small local dairy farmers found that their market in local processing factories was driven out by skimmed milk powder from the EU.