MercoPress. South Atlantic News Agency

Chilean dairy farmers request protection from Uruguay/Argentine exports

Powder milk and Gouda cheese are the main products rejected by Chilean farmers.

Chilean dairy farmers and the country’s main agriculture organization, SNA, are demanding safeguards against the import of powder milk and Gouda cheese from Uruguay and Argentina arguing “disloyal competition”.

The strong Chilean farm lobby requested on Monday that a 31.5% tariff be imposed on dairy imports from the two countries, because their industries are “heavily subsidized”.

Trade relations between Argentina and Uruguay with Chile are ruled by Mercosur, of which Chile is an associate member. Santiago de Chile slaps a 0.2% tariff on all produce imported from the Mercosur customs union which also includes Brazil and Paraguay.

Chilean dairy farmers and industry have warned that if no measures are taken to counter imports and protect domestic production, an estimated 13.000 jobs could be threatened taking unemployment in the sector to 22%.

The Chilean Federation of Dairy Producers, Fedeleche, presented their request to the National Price distortion national committee, a technical organization which has thirty days to assess the petition.

Fedeleche president Dieter Konow said it was crucial the safeguard should be in place before September first when the spring-summer season begins in the austral hemisphere.

Chilean farmers argue that their Argentine counterparts receive subsidies of 0.04 US cents per litre of milk monthly, which enables them to sell their produce cheaper than in Chile where no such support exists.

In October 2006 Chile began applying a 23% tariff on imported powder milk, (whole and skimmed) and on Gouda cheese to protect domestic production which was suffering a dramatic fall in prices.