MercoPress. South Atlantic News Agency

Chile slaps 15% safeguard on Argentine, Uruguayan milk and cheese imports

Fedeleche’s president Dieter Konow was asking for a 31.5% safeguard

Chilean dairy farmers on Wednesday expressed satisfaction with the government’s decision to impose safeguards on powder milk (whole and skinned) and Gouda cheese from Argentina and Uruguay.

“Justice has been done with the 15% safeguard tariff on dairy imports from Argentina and Uruguay”, said Dieter Konow, president of the Chilean Federation of Dairy Producers (Fedeleche). However he added that dairy farmers were expecting a more favourable resolution to their request.

“We would have liked a safeguard of 31.5%, but we tried to see the glass half full and this new scenario should help us improve, partially, our position vis-à-vis industry”, added Konow.

As to the duration of the safeguard, Konow said he expected it would be effective “as long as it is necessary” given the volatility of the milk and cheese market.

Wednesday morning President Michelle Bachelet informed the Chilean “Distortions Commission” it had decided to impose a safeguard on imports of powder milk, whole and skimmed, and on the Gouda cheese, on request of the Chilean Federation of Dairy Producers that claims their Argentine and Uruguayan counterparts receive subsidies to the tune of 30%.

The official decree stipulates that the Ministry of Agriculture and Customs will be making a daily monitoring of import costs.

Last Monday President Bachelet addressed Fedeleche yearly convention, Enagro 2009 but anticipated she would not change any policies.

“Of course what is happening in the milk sector is worrying to us” said Bachelet at the Fedeleche reunion.

In September 2008, Chilean milk producers earned 200 Chilean pesos per litre (US$0.36) and today they make less than 130 pesos per litre (US$0.23), said Konow.

“President Bachelet, we need safeguards, or should we eat the cows?” read a sign outside the Fedeleche meeting.

Chile slaps a 0.2% tariff on all produce imported from the Mercosur customs union, which also includes Brazil and Paraguay.

Chilean dairy farmers warned that if no measures are taken to counter imports and protect domestic production an estimated 13,000 jobs could be threatened, taking unemployment in the sector to 22%.

Chilean farmers argue that their Argentine counterparts receive subsidies of US$0.04 per litre of milk monthly. This enables them to sell their dairy products more cheaply.