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                                Update Dumping in Jamaica
                                         A Report on the Dairy Industry




                                           September 10, 2001



By:                    Fiona Black
                       48 Daisy Avenue
                       Kingston 6
                       Jamaica




For: Netherlands Organization for International Development
           Co-operation (NOVIB)
                       Mauritskade 9
                       P.O. Box 30919
                       2500 GX The Hague
                       The Netherlands
Confidential: Not for distribution or publication



                                                    Contents

           1.0         Executive Summary                                        Page 2

           2.0         Overview of Recent Developments                           Page 3-7
           2.1         The Jamaican Government
                       2.1.1   Elections in 2002
                       2.1.2   Industrial Climate
                       2.1.3   Milk Production Strategy
                       2.1.4   Dairy Policy
           2.2         The Jamaican Dairy Industry
                       2.2.1   Serge Island and Surrounding Small Farmers
                       2.2.2   Nestle Down-sizing
                       2.2.3   Island Dairies Expansion
                       2.2.4   Alcan changed to Windalco
                       2.2.5   The Federation Takes Over Century Dairy
                       2.2.6   Dairy Industries and New Zealand Influence
                       2.2.7   Lasco’s Good Image
                       2.2.8   Other Importers
           2.3         Jamaica Dairy Farmers Federation
                       2.3.1   Marketing Milk
                       2.3.2   School Feeding Programme
                       2.3.3   Policy on Imports
                       2.3.4   Bulk Feed Procurement and Cost of Production
                       2.3.5   Farm Gate Prices in 1999 and 2000
                       2.3.6   Current Farm Gate Prices
                       2.3.7   Retail Prices
                       2.3.8   Milk Production Enhancement Programme
           2.4         Jamaica Dairy Development Board
                       2.4.1   Objective
                       2.4.2   Formation
                       2.4.3   Activities
           2.5         European Union Delegation in Kingston
                       2.5.1   Food and Agriculture Organization (FAO)
                       2.5.2   Eastern Jamaica Agricultural Support Programme (EJASP)

           3.0         Statistics                                               Page 7-8
                       3.1       Imports

           4.0         Foreign Aid                                              Page 9

           5.0         Conclusions                                              Page 9

           6.0         Sources                                                  Page 9


                       Annex




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1.0        Executive Summary

           Damage was being done to the dairy industry by the cheap imports of milk solids, which displaced
           the local fresh milk in 1996 when the Commonwealth Secretariat sent a team to Jamaica to study
           the dairy sector. This was indicated in their final report (A Milk Production Strategy for Jamaica)
           and yet an opportunity was seen to develop the dairy sector because of the consumption of dairy
           products and the resources available. Jamaica has had a tradition of sugar production but the future
           for this sector appears poor and alternative agricultural production is essential.

           The Commonwealth Secretariat laid out the method by which milk production could be increased
           and prices be brought down. This method included;

           (a) the government forming a Dairy Board to compile information and make policy to ensure
               development at a cost of US$1 million,
           (b) the farmers forming a federation and taking the initiative to control their dairy sector by
               implementing a Milk Marketing Project and a Milk Production Enhancement Programme at a
               cost of US$21 million.

           Progress has been made in implementing the Strategy in that the farmers formed the Jamaica
           Dairy Farmers Federation and it became operational in 1999 and currently the membership
           produce some 75% of national milk production. The funding assistance for the Milk Marketing
           Project (US$10 million) was found from the US government 1999 PL480 Programme. The
           Jamaica Dairy Development Board was formed in 2000 and has published Dairy Facts and Figures
           1999-2000 as well as completed a study on the Cost of Production. The Federation and Board
           together have made recommendations on increasing import duties on dairy products for all uses to
           50%. As an interim measure the Board has recommended (with Federation support) that any
           concessions on milk powder import duty be linked to the use of local fresh milk.

           The farm gate prices (A-grade from US$0.55/L to US$0.31/L) and the retail prices (UHT from
           US$1.65/L to US$1.05/L) have been falling as the Jamaican currency devalues as well as in local
           currency terms. This has not seen the increased use of local milk. The farmers have suffered a
           series of setbacks with irregular take-off of production. The small farmers who supplied in churns
           on a collection routes by Nestle have suffered the worst as cooling stations are used and the
           compensation for the additional costs have been inadequate and often the distances are
           impractical. These problems have caused farmers to lack confidence in their Federation and what
           it is capable of achieving. The achievements are negated if the market for local milk is not assured.

           Dairy imports remain high, the majority of the imports are in the form of cheese and milk powder,
           but ice cream imports are rising fast. Of the 152.8 million litres milk equivalent consumed in
           Jamaica in 2000 only 25.4 million litres was from Jamaican farmers. The source of milk powder is
           primarily from the EU, where export subsidies bring down the price (by 137% in 1995). Jamaica
           is a member state of WTO that is working towards removal of subsidies and in such a situation
           Jamaican milk prices will be competitive. Until the subsidies are removed Jamaican farmers need
           protection to increase production. The government of Jamaica is taking long to implement the
           policies necessary to level the playing field and in the meantime use of local milk is declining and
           manufacturers are moving towards the importation of finished products.

           The national target for milk production is 50 million litres in year 2004, and production was 25.4
           million litres in year 2000. The target can be achieved in year 2004 or shortly afterwards if the
           imports of milk powder are not displacing local production and farmers are assured a market for
           their milk.




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2.0        Overview of Recent Developments

2.1        The Jamaican Government

2.1.1      Elections in 2002
           The ruling party (PNP) has been in power for 3 successive terms and national elections will likely
           be in December 2002 and it is predicted that violence will escalate. The chances are that people
           will choose to change the ruling party despite the disorganized opposition (JLP and NDM). The
           country has suffered outbursts of civil unrest in outrage of some government actions. This does
           not affect the dairy industry specifically unless roads are blocked preventing the movement of
           milk, or if power outages result (which has happened once each year for the last 3 years).

2.1.2      Industrial Climate
           The large variance between the rich and the poor has been reported as the second worst in the
           world. This has resulted in poor industrial relations and strike action has disrupted some
           processing plants and large farms. All of Jamaica’s agriculture is under threat from cheap imports
           and uncompetitive prices in the international market for exports. Farmers are uncertain of their
           market and are going out of business. More land is becoming idle. It is intended that the poor will
           find job opportunities in rural areas with the development of the dairy industry. Jamaica has a
           tradition of dairy farming and is producing only 20% of consumption.

2.1.3      Milk Production Strategy
           The dairy sector was implementing a strategy for milk production that would see Jamaica
           becoming self-sufficient in milk and milk products on a globally sustainable basis
           (Commonwealth Secretariat, 1996). The strategy saw the formation of a Federation of farmers;
           marketing milk and a statutory body, the Dairy Board; gathering information and guiding policy.
           Both bodies have become a reality. Now the Federation is on its path to demonstrate that milk can
           be processed and marketed more efficiently with its own processing plant and most importantly, to
           market all its member’s raw milk. National milk production has fallen to 25.4 million litres in
           2000 from 27.5 million litres in 1999. There are difficulties being faced within the Federation with
           rapid change-over of staff and slow release of project funds from the government.

2.1.4      Dairy Policy
           The government has supported the formation of the Jamaica Dairy Farmers Federation and later
           the Jamaica Dairy Development Board. Government policy has not come into effect to protect
           these efforts from dumped milk imports and the largest users of fresh milk are complaining that
           they cannot be competitive. There is no clear signal from government to implement
           recommendations by the Federation and the Board for countervailing duty against milk imports
           that are mostly cheap due to export subsidies and which undermine the market for fresh milk from
           Jamaican farmers.


2.2        The Jamaican Dairy Industry

2.2.1      Serge Island and Surrounding Small Farmers
           Serge Island is enjoying the market space left by Nestle selling out their pasteurised milk lines and
           has become the predominant marketer of pasteurised milk in Kingston, the primary market. Serge
           Island is continuing with its UHT line of milk products and has led the way with 3 sizes of pack,
           which now Nestle has followed. The small farmers supplying milk to Serge Island went through
           several difficult months in the second half of 2000 and there was fallout of producers who could
           not meet the higher quality standards. The farmers turned to the Federation for help but were
           disappointed that the Federation could not offer an alternative market for their milk. The
           Federation encouraged the farmers to form a co-operative to negotiate with Serge Island, the only
           processor in the area. This year, 2001, the problem of take-off of farmers’ milk seems to have been
           resolved as the demand for Serge Island brand milk has increased. Until recently Serge Island




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           processed some 20% of the fresh milk from its own farms and dairy farmers in the parish of St.
           Thomas.

2.2.2      Nestle Down-sizing
           Nestle has made considerable changes to downscale their manufacturing operations. In February
           2000 Nestle met with the Federation to advise they would be cutting back on raw milk purchases
           by 30% effective the following month saying that condensed milk sales were down due to
           competition from sachet milk powder. Late in year 2000 Nestle sold its pasteurized milk line to
           another processor (Island Dairies) located 100 km outside of Kingston. In the first quarter of year
           2001 Nestle stopped collection of churn milk and only took milk from the small farmers that were
           prepared to take their milk to 4 locations across the country. In July/August 2001 Nestle moved its
           UHT processing from Kingston to Bog Walk, centralising its operations. Around the same time
           Nestle stopped manufacturing ice cream in Jamaica, the traditional brand is now being imported.
           These changes disrupted Nestle’s routine collection of raw milk at a time when farmers were
           already in difficulty marketing all their milk and it caused the spoilage of several tanks and truck
           loads of raw milk. In recent years Nestle was purchasing some 70% of national milk production.

2.2.3      Island Dairies Expansion
           Island Dairies does not appear to have had any significant impact on the Kingston market to
           compensate for their purchase of Nestle’s Cremo brand of pasteurized milk. Within a month of
           handling Cremo brand there was a televised complaint by a customer who bought a contaminated
           box of milk. They have also been expanding their non-dairy line of drinks. Island Dairies has
           traditionally processed some 5% of national production from its own farm and others in the
           region.

2.2.4      Alcan has changed to Windalco
           Alcan Jamaica Company had the largest dairy herd and operated a small pasteurized milk plant
           intended to handle seasonal market fluctuations. Alcan operations were sold to an international
           corporation this year but there has been little change in the farming or processing activities. Their
           new company name is Windalco. During the difficult milk marketing months of July and August
           Windalco increased the volume that was handled through their own processing/marketing system.
           The Manchester Pastures brand has had less than 5% of the market share of liquid milk. Alcan is
           the only farmer/processor and member of the Federation as it is committed to bringing their
           processing facilities into the Federation.

2.2.5      The Federation takes over Century Dairy
           The milk processing assets of Century Dairy Farm were bought by the Federation in November
           2000 and the brand was off the market until February 2001 while the plant was being refurbished.
           The farmers’ expectations of volumes, quality and prices the plant would be able to achieve is a
           considerable target the management are yet to achieve. Despite this, the milk market is changing
           and prices are falling as competitors prepare for the much publicised objectives of the Federation –
           to lower retail milk price and improve milk quality. The Century brand has had good and bad
           times and has had about 5% of the liquid milk market share.

2.2.6      Dairy Industries and New Zealand Influence
           Dairy Industries continues to use milk products from New Zealand, mostly cheese, and also milk
           powder and butter. Dairy Industries used to make tins of processed cheese in Jamaica for the UK
           and USA indigenous markets, but these markets have been closed to them in the last 2 years.
           Currently Dairy Industries boasts ISO9000 certification and repack cheddar cheese, butter and
           whole milk powder as well manufactures processed cheese and yogurt. Dairy Industries and
           Nabisco, a biscuit manufacturer, use New Zealand milk powder. Dairy Industries joined the milk
           powder in sachet race with a calcium-enriched WMP product in year 2000. Some 400 tons (5% of
           total ) milk powder are imported from New Zealand annually.




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2.2.7      Lasco’s Good Image
           Lasco is a high profile company in Jamaica. The Chairman and CEO started the company when
           the government liberalised the importation of milk powder in 1991, and had previously been
           packing milk powder in sachets intended for the poor. Lasco is the only sachet milk powder
           distributor that enjoys zero duty on imports, which was granted at its inception. The company is
           seen as being the defender of the poor, despite the substantial profits that it has gained. These
           profits have permitted Lasco to sponsor athletes to the Olympics, give all-day seminars on lactose
           intolerance to nurses, give awards to outstanding teachers and police. The Lasco line of products
           has increased dramatically from skimmed and whole milk powder, flavoured milk drinks in
           sachets, soy-drink products to imported canned meats, bottled sauces and pharmaceuticals. In year
           2000 most imports of milk powder by Lasco came from the Netherlands.

2.2.8      Other importers
           Another food distributor, Ramsons, has imported a new flavoured milk product already packed in
           a larger sachets. The fast food franchises now include Baskin Robbins, TCBY, Country Bucket
           (specifically with dairy products) and also McDonalds, Burger King and Wendy’s which seem to
           have their own channels of importing dairy products.


2.3        Jamaica Dairy Farmers Federation

2.3.1      Marketing Milk
           The Federation has stuck to the Commonwealth Secretariat Strategy of 1996. The Federation
           within its Milk Marketing Project is processing milk through an old plant which was refurbished
           in 2001 and are embarking on a new larger processing plant that will be capable of making milk
           powder for the seasons when market does not match supply. The Milk Marketing Project received
           funding approval by the US and Jamaican governments for US$10 million from the PL480
           programme of 1999. The Project slated to start in April 1999 started in September 2000 due to the
           slow release of funds from the Jamaican government. Two thirds of the funds have still not been
           released to the Federation.

2.3.2      School Feeding Programme
           Raw milk of 1.3 million litres was sold to the School Feeding Programme plant (for pasteurised
           milk) through the Federation in year 2000. This offered an alternative market for milk that Nestle
           refused to buy, but has started a logistical problem when schools are closed. Nestle was expected
           to fluctuate their purchases to facilitate the school programme but have used the situation to lower
           the price they pay for fresh milk. The Federation has been used to split the dairy farmers; as the
           organised groups were the only way to efficiently re-route milk to the school programme, and now
           those groups have been put at a price disadvantage by Nestle. The Federation is still trying to
           negotiate with Nestle to take the volumes of milk required in the school vacations at the A-grade
           price so that full use can be taken of the school programme market (agreed at 3.2 million litres, but
           potentially could be 7.0 million litres).

2.3.3      Policy on Imports
           The Dairy Board has a recommendation tabled before government, which has the support of the
           Federation, for the concessionary duty rates (5% vs. 30% or 50%) on imported milk powder to be
           linked to the manufacturers use of fresh milk. This has been stuck for a year in the Ministry of
           Agriculture. The influence of Nestle (multinational) and Lasco (a Jamaican retailing company) on
           government decisions is very strong. Nestle was buying over 70% of Jamaica’s raw milk until
           March 2000 when it stated that it would be cutting back collection by 30%. The average farm gate
           price is falling and still imports of milk products are displacing local milk.

2.3.4      Bulk Feed Procurement and Cost of Production
                   The Federation’s negotiations for the bulk procurement of concentrate feeds has lowered
                   in real terms the variable cost of milk production despite high rates of inflation. A study
                   conducted in 1996 indicated that the average COP was J$15.29 (US$0.38). The Dairy



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                       Board completed a survey of the year 2000 COP for eleven dairy farmers varying in size
                       from 4 milking cows to over 2000 cows. The average variable cost was J$15.93
                       (US$0.34) with a margin of J$6.23 (US$0.13) per litre. The overheads or fixed costs
                       included the machinery, charge for land use, interest on livestock investment and salaries
                       to management made most of the eleven farms unprofitable. Most farms had not reached
                       the break-even yield, which could be a factor of the milk sale problems.

2.3.5      Farm Gate Prices in 1999 and 2000
           The price of milk in 1999 was $22.14 (US$0.55) for A-grade and $16.34 (US$0.40) for B-grade
           milk in churns from small farmers. In year 2000 the farmgate milk prices fell in real terms as the
           J$ devalued and A-grade price was now US$0.52 and B-grade price was US$0.39 per litre. Also in
           year 2000 Nestle started taking in some milk in school vacation periods at J$13.00 (US$0.31) per
           litre if there was no alternative market and it was said to be used in manufacturing condensed
           milk, ice cream and nutritional milk drinks.

2.3.6      Current Farm Gate Prices
           This year 2001 the situation has worsened for the dairy farmers and the price has fallen further,
           especially for the small farmers who were selling milk in churns on collection routes. Nestle set up
           three cooling centres, and pay the farmers J$17.00, but of this J$3.40 goes towards cooling centre
           operation and transportation and hence the net price is J$14.15 (US$0.31 per litre). Many small
           farmers cannot afford to take their milk to the cooling stations and have gone out of business. It
           may be difficult to get accurate information from Nestle on how much milk is being collected via
           the cooling stations and from how many farmers and this would require investigation at the
           cooling stations and with farmers themselves. The dollar has devalued further hence A-grade milk
           is US$0.49 per litre.

2.3.7      Retail Prices
           In 1996 when the Milk Production Startegy was written milk retailed at J$60 - $J66 (US$1.50 -
           $1.65) per litre, with the higher prices for UHT milk. A few months before the Federation got the
           Century brand in the market again the retail prices were coming down. Currently milk is retailing
           at J$57 - $62 (US$1.25 -$1.36) per litre, with the higher prices for pasteurized milk. Sale prices
           have now reached J$48 (US$1.05) per litre for UHT milk and may indicate that processors and
           retailers are becoming more efficient.

2.3.8      Milk Production Enhancement Programme
           The Strategy for Milk Production included an extensive programme of veterinary services, pasture
           development, training and services to dairy farmers to increase production and lower cost of
           production. The training aspect was started within a memorandum of understanding with the
           Ministry of Agriculture and the Human Employment and Resource Training/ National Training
           Agency (HEART/NTA). With HEART/NTA funding the pilot programme Dairy Farmer Training
           started in September 2000 and ended this year with moderate success. The Federation has as yet
           not been able to get the funding assistance to continue the programme as is intended. The human
           resources of the Federation will need to be improved to manage this aspect of its objective. It was
           estimated that US$10 million would be required for the entire Milk Production Enhancement
           Programme.


2.4        Jamaica Dairy Development Board

2.4.1      Objective
           The Board’s mandate is to promote, through policy interventions, the attainment of self-
           sufficiency in local milk production in a sustainable and globally competitive manner. A principal
           objective of the Board is to create and maintain transparency within the Dairy sector through the
           collection, analysis and publication of information for use by all stakeholders.




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2.4.2      Formation
           The Board was established in July 1999 in the Ministry of Agriculture and has now a Chief
           Executive, an Agricultural Economist and a Production Specialist. The legislation for the Board
           has been approved by the Legislation Committee and is expected to get Cabinet approval in
           September 2001.

2.4.3      Activities
           The Board has produced one release of Dairy Facts & Figures (1999-2000) and is ready to release
           the second issue for the period (2000-2001). Much of the information gleaned is from data
           supplied by the Statistical Institute of Jamaica (STATIN). Other sources include the Data Bank
           and Evaluation Division of the Ministry of Agriculture. It is intended that producers, processors
           and other players in the sector will in the future provide much of the source data. The Board has
           also conducted a study to determine the cost of production of milk in year 2000. The study was
           completed and presented to the industry in June 2001. The Board’s Production Specialist has been
           working with dairy farms on ways of reducing the cost of production, especially with improved
           forage production. The Board firmly supports the Federation with the recommendation that
           concessions on import duty for milk powder be linked to the use of local milk. The request is with
           the Ministry of Agriculture but has not made any progress to being implemented in a year.


2.5        European Union Delegation in Kingston

2.5.1      Food and Agriculture Organization (FAO)
           The FAO has supported the activities of the Federation in efforts by farmers to take more control
           of the processing and marketing of milk. A technical cooperation project (TCP) was amended to
           serve as the Federation’s Pilot Milk Marketing Project (value US$273,000). The processing
           equipment is in place and consultants have come to plan and implement but there is further
           expertise to be provided in training to complete the project this year.

2.5.2      Eastern Jamaica Agricultural Support Programme (EJASP)
           The European Union has through its Eastern Jamaica Agricultural Support Programme (EJASP)
           approved some funds for a small dairy project in St. Mary to be implemented by the Federation.
           The initial project was to establish two cooling stations and organize farmers into a co-operative
           supplying their milk to the Federation at J$20 per litre. The project has suffered a major setback
           and is now being changed to improve pastures and on-farm milking facilities for the members of
           the group.
                    How the problem came about; Nestle suggested that the Federation buy the bulk coolers
                    which Nestle had at one time intended for cooling stations. The Federation required a
                    commitment from Nestle to buy the same volume of milk that they had been collecting
                    by churn milk routes and a written offer for the bulk coolers. Despite Ministry of
                    Agriculture involvement Nestle refused to comply with either request and yet went ahead
                    in making alterations to their plant, which disallowed churn milk collection. In 2001
                    Nestle has set up 3 cooling stations and used one co-operative group to take in small
                    farmers’ milk. The distances are impractical and the price prohibitive and there has been
                    large fallout in milk production by small farmers.


3.0        Statistics

3.1        Imports
           Information compiled by the Jamaica Dairy Development Board (sourced from 2000; Statistical
           Institute of Jamaica) indicates that Jamaica imported US$31 million in dairy products. Some 43%
           of this (US$13.4 million) is milk powder both skimmed and whole with skimmed imports
           increasing. Cheese has increased to make up 45% of imports, The ice cream information indicates
           a sharp decease from the US$2.2 million in 1999 and does not follow the increase in ice cream
           imports seen in the market place in years 2000 and 2001. Traditional Jamaican brands of ice cream



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           are now being imported by Nestle from the Dominican Republic. Ice cream franchise chains have
           become commonplace in Jamaica.

        Table 3.1      Jamaican Sources of Milk Solids (million litres milk equivalent)
          1990    1991    1992    1993       1994    1995    1996      1997     1998           1999    2000
Powder    69.8    102.2 89.7      144.6      72.1    90.3    74.3      71.9     78.4           81.4    74.8
Cheese    42.3    27.7    34.2    47.2       28.5    47.4    38.6      47.4     51.0           44.0    52.6
Fresh     31.2    28.7    38.8    34.6       25.1    25.7    26.2      27.2     27.5           28.0    25.4
TOTAL 143.3 158.6 162.6 226.4                125.7 163.4 139.1 146.4 156.9                     153.4   152.8
Jamaica Dairy Development Board, Dairy Facts & Figures (1999-2000).

           Jamaican imports from Europe continue to increase and amounted to over 5633 tons in 2000 and
           made up 67% of the concentrated milk imports (Jamaica Dairy Development Board).

        Table 3.2                 Annual Import of Dairy Product (tons)
Dairy Product                    1995         1996          1997          1998         1999       2000

Milk & Cream           172            207          615         256                     123        250
Skim Milk Powder       1354           996          644         3849                    4176       4692
Whole Milk Powder      7891           7169         7477        3471                    4063       2905
Cond./Evap. Milk       215            52           301         202                     125        268
Whey Powder            278            491          377         302                     257        169
Ice Cream              36             250          607         816                     983        268(?)
Cheeses                4739           3857         4739        5101                    4396       5262
Butterfat              2099           1802         1803        2482                    1937       994
Others                 131            149          258         212                     214        74
TOTAL                  16915          14974        16823       16690                   16274
Jamaica Dairy Development Board, Dairy Facts & Figures (1999-2000).

           The European source countries were predominantly the UK and Germany in 1999 and Netherlands
           and Germany in 2000, followed by Belgium, Ireland, Finland, and France (Eurostat). The imports
           of milk powder from the USA were 5% of the total in 2000 and 6% from New Zealand (The Trade
           Board).

           Table 3.3            EU exports of concentrated milk (mainly milk powder)
                                to Jamaica (tons; 1990-2000)
                              1990    2351
                              1991    2657
                              1992    1148
                              1993    1566
                              1994    2899
                              1995    4272
                              1996    3993
                              1997    4334
                              1998    4031
                              1999    4107
                              2000    5633

                       Eurostat, Intra- and Extra- EU Trade




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4.0        Foreign Aid

           While the removal of export subsidies on dairy products is a long-running issue between the
           developed countries (and Oceania is waiting for the day that they no long have to be price takers)
           the Jamaican dairy farmers are running out of solutions. It is expected that WTO objectives will
           finally be achieved and export subsidies will be lowered, but the timing of this is anyone’s guess.
           Damage has been done to the Jamaican dairy farmers and they have been asking for restitution.
           There has been communication between Minister Satu Hassi of Finland, the EU Commissioner of
           Development in Brussels, and the Inter-American Development Bank requesting funding
           assistance. Nothing has come through for the Federation other than the allotted US$10 million for
           its Milk Marketing Project (USA), but 60% of these funds have gotten stuck in government’s
           consolidated fund.


5.0        Conclusions

           The farmers need to trust their Federation. The ambitious targets of the Federation require proper
           management and have suffered a high staff turnover. The government will have to offer more
           substantial support in their policies. The price of milk is coming down at the farm gate and at retail
           outlets, so one objective is being achieved. This has not benefited the dairy farmers because not
           only is the income from their milk declining in a rapid inflation economy but the market for their
           milk is uncertain. Hence milk production is falling. The national target for milk production is 50
           million litres in year 2004, and production was 25.4 million litres in year 2000. This can be
           achieved in year 2004 or shortly afterwards if the imports of milk powder are not displacing local
           production and farmers are assured a market for their milk.


6.0        Sources:

           Commonwealth Secretariat, 1996, A Milk Production Strategy for Jamaica. London
           Eurostat, Intra- and extra- EU trade, 2001
           Jamaica Dairy Development Board, Dairy Facts & Figures, 1999-2000
           Jamaica Dairy Development Board, Cost of Production per Litre of Milk in Jamaica in Year 2000
           The Trade Board, Milk Powder Import Permits, 1999 and 2000

           Dialogue with Mr. Fred Anderson, Vice Chairman Acting Managing Director, Jamaica Dairy
           Farmers Federation and other members

Note: Only Annex attached to e-mail is the Summary of The Trade Board, Milk Powder Import
Permits, 1999 and 2000. All other annexes will be mailed with original report.




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