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Senators from dairy states leery of Australian trade pact

Negotiators urged to include barriers against cheap milk

WASHINGTON -- Senators from dairy states like Vermont fear that a proposed US-Australian Free Trade Agreement could mean "undue hardships" for American milk producers.

More than 30 senators signed a letter to President Bush last week that said the proposed trade agreement "would have dire consequences for several of America's agricultural industries including the dairy industry, unless the administration exercises great caution in drafting the trading terms that would apply under the negotiated FTA."

"For the past two years our farmers have struggled with historically low milk prices," said Senator James Jeffords, an Independent from Vermont who often votes with the chamber's Democrats. "The last thing we need right now is a flood of imported milk products that could drive prices even lower, perhaps permanently.

"I am concerned that if dairy is part of free trade, more family farms will disappear and the nation's largest dairy companies will spread their influence further."

Vermont's other senator, Democrat Patrick Leahy, said, "A trade agreement with Australia that simply opens our markets to cheap Australian imports, with no safeguards for our American dairy farmers, could be disastrous for Vermont dairy producers, their families, and our state."

The senators did not specify what safeguards they were looking for. But some Vermont farmers don't want to see any more Australian milk products on American shelves.

A compromise may not be possible, according to Diane Bothfeld, cooperative relations manager at the St. Alban's Dairy Cooperative, which includes 570 dairy farmers in Vermont with an average herd size of about 100 cows.

"We're very concerned," she said. "We just survived a low price period in 2002 and 2003."

Bothfeld said the agreement's impact will extend beyond dairy farmers.

"The other aspect of this is that the economy of Vermont is extremely dependent on dairy processing companies, like Ben and Jerry's Ice Cream and the Cabot Cheese brand," she said. "Besides the loss of income, may have as many as 2,000 jobs lost in rural communities. And in these communities, there are not a lot of other options in terms of employers."

She said that if the finalized agreement appears to hurt domestic milk producers, "we will be lobbying for a no vote in the House and Senate."

The negotiations are in their final days, with Australian Trade Minister Mark Vaile and US Trade Representative Robert Zoellick expected to finalize a deal this week.

"The negotiations are ongoing and so, consistent with our practice, we won't be discussing them until they're finished," said Richard Mills, a spokesman for Zoellick.

The US now applies tariffs averaging 100 percent on Australian dairy product imports. American dairy industry officials contend that completely opening US markets to milk and milk products from down under would cost 150,000 jobs.

Christopher Galen, a spokesman for the National Milk Producers Federation, said that Vermont dairy farms could lose $350 million in revenue over the next nine years. Vermont is one of the top 20 dairy producing states in the nation, and Massachusetts and Maine also have a number of dairy farms.

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