THE European Commission has slapped subsidies of $400 to $1000 a tonne on its dairy exports, ending all hope of a recovery in global milk prices.
The Commission's Agricultural Management Committee met last night to finalise export subsidies on cheese, butter and milk powders, that add 50 per cent to global prices.
Australian and New Zealand dairy industry leaders and analysts have condemned the move in the midst of a massive global downturn.
European dairy traders will be able to apply for an export refund (subsidy) to cover the shortfall between the EU domestic price and what they receive on the global market for butter, cheese and milk powders.
Fonterra New Zealand's GlobalTrade managing director Kelvin Wickham said the decline in international dairy prices over the past year was impacting producers globally, not just in the EU.
"Any regional subsidies or intervention had the potential to distort the market and signals to milk producers," Mr Wickham said.
