The USA and Canada export large quantities of dairy products.why?
Answers
According to the 2002 US census the Dairy sector accounted for approximately 11% of national agricultural sales.
According to the 2016 data, Canada's total production of milk is 8.4 billion L
Reasons why the USA and Canada export large quantities of dairy products
- The US government provides $31/HL in direct and indirect subsidies to the U.S. dairy industry.
- These subsidies are funded through taxpayer dollars, through programs administered by the Federal and State Departments of Agriculture, as well as U.S. irrigation programs. [A 2009 study by Grey, Clark and Shih (Peter Clark)]
- Most of the dairy industry is dominated by small, family operations.
- Most dairy farmers are part of producer-owned cooperatives.
- The dairy export incentive program is another motivating factor.
Canada's dairy industry has been operating since 1970 under the supply management system which supply is matched with the domestic demand.
Especially, the process of controlling supply of amount of imports is mainly made predictable through the system of tariff rate quotas.
USA and Canada export large quantities of dairy products and it allows the pre-determined amount of dairy products on various categories with duty free from the United States.