Sugar, Dairy Quotas Raise Aussie Doubts over US `Free Trade'

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WHEN President Clinton was elected, Australian farmers worried that he might turn out to be more protectionist than former President Bush. Two recent moves by the United States Department of Agriculture (USDA) - cutting sugar import quotas and subsidizing US dairy exports to the Philippines - are starting to confirm those fears.

The USDA announced May 12 it would decrease the quota of sugar imports by 16 percent in the 1993/94 marketing year. While country-by-country quotas have not been released yet, Australia is estimating its cut to be about 10,000 tons on a pro rata basis.

While Canegrowers, the sugar growers' association, says that the sugar will be sold elsewhere, it will be at a lower price, and they expect to lose $3 million. The US has gradually been turning off the spigot of Australian sugar over the last decade. Sugar imports have declined 90 percent since the early 1980s, from more than 800,000 tons to an expected 86,000 tons next year.

"Coming on top of restraints on Australian meat exports and the impact of US export subsidies on Australian grains and cotton, US agricultural policy is turning 1993 into a bleak year for Australian farmers," says Trade Minister Peter Cook.

Ian Ballantyne, general manager of Canegrowers, says, "In the overall scheme, the loss of the 10,000 tons isn't the issue, the {main} issue is that there is a quota. What we'd always like to see is free access to market. But given that there is one, we'd like as large a slice as we could get."

John McQueen, head of the Australian Dairy Farmers' Federation, says that the industry has been getting signals from the USDA that it will use subsidies on dairy exports, known as DEEPs (dairy export enhancement program), on products going to the Philippines. …