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This paper compares domestic dairy policies in the USA and EC and examines the impactof these policies on each dairy industry to explore domestic policy interdependence. The EC and USA havesimilar goals ofimproving farm income and use similar price support policies to achieve these goals. Thesepolicies have encouraged overproduction, generated surpluses and government stocks, and resulted in largegovernment expenditures. Both have followed a mixed surplus disposal strategy with one key differencetheEC has used export subsidies to dispose of part of its surplus on the world market. In the mid-1980s,both the USA and EC took strong action to confront these problems. The EC's use of marketing quotasand commitment to reducing its stockpiles ultimately affected the world market as its exports fell in 1989.As a result, US stocks virtually disappeared, US prices increased substantially, and US surplus disposalprogrammes ended. By recognizing the policy linkage of EC domestic policy through the internationalmarket on us stockpiles, policy makers can choose policy instruments more precisely.

Subject(s): Agricultural and Food Policy

Food Consumption/Nutrition/Food Safety

Issue Date: 1992

Publication Type: Conference Paper/ Presentation

PURL Identifier: Page range: 339-344

Total Pages: 6

Record appears in: International Association of Agricultural Economists (IAAE) > 1992 Occasional Paper Series No. 6

Autor: Marchant, Mary A. ; Neff, Steven A. ; McCalla, Alex F.


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