hey lenni the germans seem worried, page-2

very tricky issue with milk-related products because the EEC highly subsidize milk products in order to grant the income of the dairy farmers. Unfortunately this subsidiaries lead to heavy overproductions that were sold worldwide (partly as milk powder). These market is fairly attractive for German dairy farmers because they get even more subsidiaries for such exports. Now as the demand is getting stronger from overseas the production for the domestic markets suffers and due to low price sensivity for milk products in Europe and specially in Germany they try to raise the prices in Germany. This is a bizarre situation because the German tax payer subsidize the raise of the prices for the domestic market. In my view this is a very good development and I hope that market regulators will force Governments to reduce subsidiaries that will lead to lower overseas supplies, especially to Africa. Those exports has already destroyed the local milk industry and this supply will have to be reactivated in the future. Bottom line is that the agricultural sector is the sector with the highest subsidiaries world-wide, with high trading barriers and therefore artifical overproduction in the First World countires tends to destroy the local productions. Those poison gifts have to be stopped immediately and a free market has to be established. This will improve the market supply of agricultural products in the mid run and that's the optimal solution for the LDC-group.

Lenni