hey lenni the germans seem worried, page-8

Yellowcake,

you might be a good farmer - don't know but your knowledge about subsidies, production, supply-demand-issues, the European milk lakes and so is marginal. It is quite easy to explain but difficult to understand. We - the Europeans subsidies the production of milk for our farmers and so the produce much more than we can consume in Europe. So what to do? no politician dares telling the farmer to cut the milk production (because they will deposit tons of shiz infront of such politician offices)Instead of cutting the milk production the politicians decided to subsidies the processing of milk to milk powder and/or the transport of such derivates or original milk to overseas. Due to higher demand from China the milk prices climbed and the subsidies have to climb as well and we European tax payer for for it and we inflate the prices of milk. Why is this so? because of longtime distribution contracts we have to export milk powder to countries at very small prices. These small prices destroy the domestic (in Africa) milk industry because no one can produce at cheaper prices than the subsidised stuff from Europe. This causes most milk producers to give up production to leave the rural areas and hope to find a nice slum in the vincinity of the countries capital. Because many milk farmers had to give up many people move to the fast gowing slums and the buying powder of the African country drops because of more jobless people and the trading balance worsen because the African country has to import all the milk powder. THe African country has to inflate its currency and finally the inhabitants can buy less cheap milk for their income than expensive home produced milk.

Bottom line is that prices of milk are artificially high because Europeans and USA intentionally forces the LDC to cut/give up their domestic production in order to secure the income of the First World Farmers. You can exchange milk with a broad variety of other products. Immediate cancellation of subsidies and fair trade conditions for EVERY country in the world is the key to a much better allocation of food and a higher production as well.

Lenni