Ireland's dairy farmers fear EU-China trade war escalation

CGTN Europe

China's Ministry of Commerce has opened an anti-subsidy investigation into dairy products from the European Union. Ireland is a major dairy exporter to China and concern is growing there among farmers.

Transcript

00:00Bill O'Keefe's family have farmed this land in Kilkenny County in Southern Ireland for almost 400 years.

00:09With its lush, rain-soaked fields, the Republic is famous for its grass-fed cows,

00:15helping the dairy sector become a multi-billion dollar export industry.

00:21China is an important market.

00:23But O'Keefe fears his business could suffer following a dispute between the European Union and China.

00:30We are caught in the crosshairs of something that is not our making.

00:34We don't have much influence over price. We take what price we get.

00:36So anything that impacts on our price is beyond our control and is obviously a worry then for farmers over here.

00:42In Ireland at the moment it's very challenging as a dairy farmer.

00:44Costs are very high and that's the real sticky point.

00:47Milk price is OK, but the costs are very, very high and margin is tight.

00:51The dispute involves Chinese-made electric cars exported to Europe, which face anti-subsidy tariffs.

00:59Now China is investigating the EU's dairy industry for alleged subsidies.

01:05Last year Ireland exported around $470 million of dairy products to China.

01:12The Chinese subsidy investigation is currently looking at cheese and milk products,

01:17which make up about a third of total sales.

01:20Instant formula sales stand at around $300 million a year.

01:25If China includes this sector, the impact could be much more serious.

01:30Aidan Brennan is dairy editor for the Irish Farmers Journal and has been writing about the dispute.

01:36China is a large importer of dairy and beef. Ireland is a large exporter of dairy and beef.

01:41So we want to be part of the opportunity that exists in China.

01:45Whether or not this trade dispute is going to have an impact, I can't say currently.

01:49It affects a small number of products.

01:51Albeit any trade dispute is going to be damaging for farmers, so we don't want to see an escalation.

01:56But if it does happen and infant milk formula is included, it will be more damaging.

02:01In Ireland's case, China is looking into its dairy equipment subsidy scheme,

02:07where the government gives grants to farmers to modernise their equipment.

02:11Grants which the authorities say were approved by the World Trade Organisation.

02:16And it isn't just farmers who could be impacted by the dispute.

02:20Bill O'Keefe sells all of his milk to this integrated dairy processing plant,

02:26which claims to be the largest in Europe, handling a billion litres of milk a year.

02:32There are similar facilities throughout Ireland, which the industry estimates support more than 50,000 jobs.

02:39The Chinese subsidies investigation is likely to take a year,

02:43and the hope here is that by then the whole dispute will have blown over.

02:48Michael Voss, CGTN, Ireland.

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