Subsidies and Dairy Trade:

New Zealand’s unsubsidised dairy exports face a competitive disadvantage on the world stage against exports from major dairy producing economies where farmers enjoy significant levels of government support. Whilst it is generally accepted that certain types of subsidies practices distort markets, there is a lack of evidence to validate the urgency of reform to international rules and address evolving practices that distort markets and reduce New Zealand’s international competitiveness.

DCANZ is undertaking a three-year project designed to build economic modelling capability around distortions in the global dairy market with a focus on domestic support (subsidies) practices.  The Global Dairy Distortions Model is intended to make robust, evidence-based contribution to international discussions focused on disciplining trade distorting practices by providing a clearer view on the flow through to markets of these farm support policies.  In doing so we anticipate the evidence derived from the model will help focus discussions on reform and tightening of global trade rules.   Accordingly we are sharing key background documents about the model development project and process in the hope it will  help build understanding and encourage knowledge exchange.