| On my way through Bamako I was struck by the number of advertisements for milk and dairy products. I tried to investigate some of the facts behind the brands displayed on posters and screens in the city. It led me only to products made from milk powder exported by the European Union. Previously, on our way from Burkina Faso , we had stopped to visit two dairy plants. The first one was in the town of Sikasso . We asked for permission to take a look at the plant which advertised « products made from pure cowmilk ». Our request was turned down on the pretext that there was no milk to be processed. After talking to us for a few minutes, the manager admitted that the plant only used milk powder. It had initially been set up to handle milk from local farms. But for financial reasons it had been compelled to give up and turn to imported milk powder. The reason was simple : During the month of January local supply falls sharply. One litre of fresh milk would have to be sold at 300 F , while it costs only 200 F to produce 1 litre from imported milk powder… We continued our route to Koumantou, where we came upon another dairy, entirely renovated and looking excellent. We were very well received and were allowed to look into the various processing areas. Twice during our tour we saw young dairy farmers come in to deliver fresh milk. One came by motorbike, the other on his bicycle. When discussing with the man in charge, we tried to find out why this particular plant was able to use local milk supplies, while others had had to give up. We learnt that the dairy is run as a cooperative, to which groups of farmers in the area are affiliated. Obviously some important information and education work must have taken place upstream, at the initial stages of the production chain, so that all involved, both farmers and dairy workers, felt they had a stake in the results. We also gathered that the members of the cooperative had to get by with lower profits, since the dairy sells its milk at 300 F per litre. Incidentally, upon our return from Bamako , I received two documents on the subject of milk : The first one was a study by Jacques Berthelot of Solidarité (http://solidarité.asso.fr), Aggregate rate of European Union dumping in milk products 1996-2002.(February 2006). According to the study the dumping by the E.U. for the present year would amount to 38%. The second document referred to a memorandum submitted by the ECOWAS Committee on Agriculture to the meeting of the Heads of State on January 12 this year. The document sets out proposals for tougher protection of some agricultural products , up to 50%, while the current maximum within the UEMOA (West African Economic and Monetary Union, W.A.E.M.U.) is 20%. The memorandum further suggests the introduction of three supplementary mechanisms : 1. A safeguard mechanism for agriculture 2. A decreasing protective tax 3. A compensation levy. The last one is designed to neutralise the impact of unfair competition caused by export subsidies. It is this mechanism that is of interest here. Let us see what would happen if it were applied to imports of milk powder from Europe . If we assume that subsidies are reflected on the selling price in their entirety, a product which would normally be sold at 100 F when exported, can instead be sold at 62 F , because it is subsidised to 38%. If a levy of 61 % could be applied (61% of 62 F = 37,82 F ) the price could be restored to a normal level, i.e. close to 100 F . It is on this price that the regular customs duties should then be calculated (between 5 and 20% within the W.A.E.O.U.). With such a mechanism in place, the price of 1 litre of milk reconstituted from milk powder would go up from 200 F to 380 F . Thus locally produced milk would again become competitive. All or part of the income generated by the compensation levies could be geared to development of the domestic milk sector. It would for example be possible to support the pre-dairy link, the cattle breeders, and help them set up a distribution network for animal feed ... Within a few years time, milk production which is still low, could take off rapidly. Koudougou, February 12, 2006 Maurice Oudet | 
View from the South