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Spilt milk : trade liberalisation and the Barbados dairy industry

University of British Columbia

Dairying in Barbados is under tremendous pressure. Government reduced its role in the industry during the 1990’s structural adjustment programme. A quota system took effect. Milk production fell nearly 50 per cent between 1992 and 1993. By the end of 2010, 16 commercial dairy farmers remained in the industry – less than half of the 37 registered farmers in 1990. National milk output stood below 7 million kilograms - one-half of the 14 million kilograms recorded in 1991. Farm consolidation is common worldwide. The precipitous drop in milk output that occurred in 1992 Barbados is not. Dairy products constitute a significant part of the local diet and income. Milk remains one of the few agricultural products in which the island claims self-sufficiency. Hiccoughs in this industry trickle down to the larger society making it imperative that difficulties in the industry be identified and addressed. The changing international trade regime, farm management practices, domestic policy and weather patterns all potentially affect economic outcomes. We examine whether moves toward trade liberalisation increased milk-based imports. Our findings show it unlikely for milk-based imports to have been responsible for the 1992 milk production drop. Today, however, the evidence suggests that trade liberalisation is exerting pressure on the local industry. Fresh milk and cream imports rise more than 3 percent after 2000. Imports of milk products that compete with locally produced ones also exhibit signs of increase. Questionnaire-based responses identify structural characteristics of the industry. Survey data indicate high farm-level costs of production - some hovering around US$1 per kg – high prevailing price levels, reproductive and management issues, a paucity of industry support services and industry-specific research, and the absence of independent quality control and quota administration. Evidence of industry distress includes declining farm numbers, low production, and high costs. In short, we examine factors that affect the economics of producing milk in Barbados. We find that the viability of dairying in Barbados depends on successfully dealing with domestic policy and herd management issues, given the shifting trade environment.

Text

2011-10-31

Attribution-NonCommercial-NoDerivatives 4.0 International

http://hdl.handle.net/2429/38432

Agricultural Economics

University of British Columbia

UBCV

http://creativecommons.org/licenses/by-nc-nd/4.0/