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THAI-AUSTRALIA FTA: 1,500 dairy farmers to protest

The Nation, Bangkok

THAI-AUSTRALIA FTA: 1,500 dairy farmers to protest

By Jeerawat Na Thalang

18 June 2004

Will repeat demand that govt remove sector from trade pact

Around 1,500 farmers from 10 dairy co-operatives will gather at Kasetsart University today to repeat their call for the government to withdraw dairy products from the free-trade agreement with Australia.

Signing of the FTA as it is would kill the local dairy industry, they said, and jeopardise the future for farmers who have been under Royal patronage for over 40 years

Adul Vangtal, president of Thai Holstein Friesian Association, told The Nation the association’s protest was vital - as Prime Minister Thaksin Shinawatra is due to fly to Canberra to sign the FTA with Australia early next month.

Thai trade negotiators have already completed talks on the Thai-Australian FTA blueprint, which will include trade and services sectors. But the negotiators put dairy and milk products on a sensitive product list subject to protection until the year 2020.

But local dairy farmers said the 15-year protective clause was not enough. "The livelihood of around 150,000 dairy farmers are under threat if tariffs drop to zero after 15 to 20 years," he said.

Adul described the Thai dairy industry, including dairy products and related industries, as a Bt10 billion per year operation. He contends that losing dairy farming affects the co-operative system and economic sustainability.

Australia and New Zealand are the world’s most competitive dairy producers, Adul said, due to supportive climates and the fertility of their landscape, which enhances the productivity of their dairy producers.

"Dairy production is for small farmers because it never provides a huge profit. It’s a self-sufficient industry. Farmers have to be attentive to milk cows. That’s why big corporations like Charoen Pokphand group are not interested in investing in dairy farming," he said.

"Even the US dares not face direct competition. US negotiators withdrew dairy products and sugar in the last minutes of their talks [on the US-Australia FTA]."

Thai dairy farmers are "generally competitive". The production cost of raw milk in Thailand was lower than overheads in Japan, Switzerland and Norway and equivalent to that of the US, Denmark and the Netherlands, which all have older dairy farming industries, he said.

Local dairy farmers also want the government to drop dairy products from trade talks with New Zealand. Permanent Secretary for Commerce Karun Kittistaporn is currently in Wellington for talks with New Zealand officials.

The Thai Holstein Friesian Association sent an open letter to the New Zealand ambassador on Monday, which said: "We certainly cannot accept whatever is offered by the Thai negotiators if dairy products are included in the agreement."

Adul said: "Every country fears dairy products from Australia and New Zealand."

The dairy producers association has also urged the government to establish a Milk Board, in the same fashion as the Sugar Board, to oversee the local dairy industry.