Thread by @Jim_Cornelius

Well you've provided me with 4 links.

The first one is about milk. We'll come to this later.

The second one is a dead link

The third one mentions the EU in passing, and also Trump in passing with regards protectionism vs globalisation. I'll ignore this as it's just vague.

...

The fourth one is again about milk.

The 5th one is not an article it's a letter to the Guardian by Sam Akaki. You are the 77th person to send me that link. I have a standard response now.

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So lets talk about milk.

In the 1970s/1980s milk overproduction in the EEC led to infamous butter mountains etc. So in 1984 the EU introduced milk production quotas to limit production. This continued until 2015 when milk quotas were scrapped.

en.wikipedia.org/wiki/Milk_quota

So since then farmers have been free to produce as much milk as they can sell. But there's an important point to note. Since milk quotas were introduced the size of the dairy herd has decreased even as the EU has expanded. ec.europa.eu/eurostat/stati…

So production of milk and milk products increased and this led to a fall in the price.

So from 2015, no quota, no subsidies, production increases and price falls, and dairy farmers potentially go out of business.

bbc.co.uk/news/business-…

But there's a safety net. The EU will buy up milk in the form of skimmed milk powder (SMP), which has a long shelf life, when the price drops sufficiently low.

And that's what it did. Stockpiling till the price rises sufficiently to sell it off.

But the price has stayed low and the stockpiles have grown.

fwi.co.uk/business/uk-ad…

Two significant reasons why the price remained low after the ending of milk production quotas.

The Russians banned agricultural imports from the EU and a reduced demand from China as they increased their own herd.

independent.ie/business/farmi…

Russia had banned EU agricultural products in retaliation for sanctions over Russia's actions in the Ukraine. bbc.co.uk/news/world-339…

So anyway, the EU was stockpiling SMP and the stockpile increased.

But early this year it was decided that the price at which the EU intervenes would be set to zero, so no more stockpiling of SMP. dairy.ahdb.org.uk/market-informa…

Now lets recap.

1970s, overproduction
1980s production quota introduced.
2015. quota scrapped
2015-2017, price falling, safety net, EU stockpiling.
2018. EU stockpiling suspended.

So where does the EU selling off cheap milk powder to African nations come into it?

It doesn't.

There's an international market for milk powder.

Here's a breakdown of the EU exports for dairy products.

WMP is Whole Milk Powder.

ec.europa.eu/agriculture/si…

So we've got 2016 and 2017 figures there. Algeria with which the EU has an Association Agreement on trade with is the biggest export market outside the EU for SMP and WMP. but we're interested in Saharan Africa really aren't we. Although I can also look at Algeria,

Now, remember since the 1980s till 2015 there's been quotas to limit production, which keeps the price stable, prevent over production and farmers going bust, and herds have been reducing in size, but this EU price has been above world market prices.

So measures have been in place to reduce production. But we're consuming less milk products. So we still have overproduction and te overproduction is priced out of the international market.

This is where subsidies come in, so milk traded internationally rather than be destroyed

But now since 2015 the quotas have gone and the price has fallen. We're stockpiling. Stockpiling means its not getting sold off cheaply and dumping on Africa etc.

So anyway back to Africa. On that table Nigeria is the main Saharan country shown there. So lets look at Nigeria. Using Trade map.

Here I run into something I'm a bit fuzzy about

When you look at tariffs or trade figures there's an international system used.

It's called the Harmonised Commodity Description and Coding Systems, known as the Harmonised System for short (HS). It's maintained by the World Customs Organisation
wcoomd.org/en/topics/nome…

Now not all countries drill down the branches. And this is where there's an issue with Nigeria as far as TradeMap is concerned. The data is a bit patchy,

Concentrated milk products fall under HS 0402 and then the subdivisions become very complicated for fat content and packaging size and whether the product is sweetened and whether it's baby milk etc.

So I was unsure what to look under as there's no specific WMP category. SO instead I decided to just look at the 0402 category (Milk and cream, concentrated or containing added sugar or other sweetening matter).

So here's the table.

Here's the same data but using the percentages instead.

On average ~ 25% of imports for concentrated milk products come from the New Zealand, and between 20 and 40% come from the Netherlands. Rest of the EU making up the bulk of the rest. Basically about 65% comes from the EU.

So there's no doubt that a considerable portion of their concentrated milk imports come from the EU.

But it's interesting that at least a quarter is from New Zealand, Does anyone ever talk about New Zealand dumping on Africa?

But is this import simply meeting demand, feeding the growing population or is it cynical dumping as is suggested?

Perhaps this article in the Economist, helps use with this question. economist.com/news/middle-ea…

The final paragraph is telling.

"Yet for all the difficulties he faces, he is struggling to meet demand. “We are making a very good profit,” he says. “If you can do that with milk, you can do it with anything.”

Is the EU really at fault here?