I am writing to congratulate you on your June 17 editorial, "Breaking Up Cartels" (Page 10A). My husband and I found its focus on global cartels - "in order to allow competitive markets to work better" - to be timely and pertinent to a situation that is hurting dairy producers across the United States.
Dairy farmers are now faced with an entirely new set of government-imposed problems in the form of a GATT (General Agreement on Tariffs and Trade) treaty that was negotiated by U.S. trade officials who are ignorant of life on a dairy farm and the intricacies of the dairy market.
Your editorial points out a serious problem for some businesses: price- fixing schemes that are encouraged by governments. For those of us involved in dairy production and the marketing of our dairy products, what concerns us most is that the Uruguay Round-GATT agreement bypassed the issue of marketing boards and state trading companies. I am referring specifically to the New Zealand Dairy Board.
New Zealand's dairy board is engaging in monopolistic market practices. Please note that this is not just the opinion of one dairy farm wife from New York. The U.S. Department of Agriculture's Foreign Agriculture Service, in its March 1994 publication, "Dairy: World Markets and Trade," confirms my assertions.
The Agriculture Department's report says the New Zealand Dairy Board, as a . . . statutory export monopoly, has the advantage of sole sourcing (and pricing) rights for New Zealand dairy products destined for export markets." The report also affirms that "while the Uruguay/GATT round bypassed the issue of marketing boards and state trading companies, the New Zealand Dairy Board remains an unreformed and anti-competitive entity."
Stated simply, the practices of New Zealand's Dairy Board make Leona Helmsley look like Mother Teresa. And what is the U.S. government doing about the New Zealand cartel's less-than-charitable practices? It is rewarding the dairy board under the GATT by giving New Zealand an additional 5,100 metric tons of cheddar cheese for processing.
In a recent meeting with high-ranking Agriculture Department officials in Washington, I complained about the New Zealand Dairy Board's practices. I asked one department official, who proudly informed me that he had been instrumental in negotiating the U.S. agricultural portions of the Uruguay Round, what could be done to curb the market rigging practices of New Zealand's Dairy Board. His answer was rather simple: "Nothing, because we (the Clinton administration) don't want to upset New Zealand."
Since my government doesn't want to upset New Zealanders, it has managed to upset me, countless dairy producers across the United States and members of my organization, Women Involved in Farm Economics. Considering all that, I would like to pose a series of questions to the U.S. Trade Representative.
Why does our government want to destroy a vital U.S. food-producing industry that provides essential, wholesome products to countless families every day of the year? Why does our government want to become totally dependent upon dairy imports? What government training program will be created, costing U.S. taxpayers billions of dollars, to retrain displaced U.S. farmers and their families? What alternative will be available to farmers who don't want to leave the rural environment into which they were born, or the farm upon which their families have toiled for generations?
Would it not be wiser to keep farmers doing what they do best - producing food and fiber and paying their taxes - rather than joining the welfare lines? Our trade negotiating officials - the Clinton GATT Giveaway Gang - may be FOBs (Friends of Bill) and FONZs (Friends of New Zealand) but I don't think they are Friends of American Agriculture.
in Farm Economics