International dairy product aid & trade 1960s~1990s: focusing on the EU and India in operation flood

Abstract

This thesis investigates the interrelationship between dairy aid and trade. After WW-II US dairy aid contributed to rises in consumption and sales in the Pacific; US domestic politics and Cold War strategy influenced aid programmes. Similarly, when dairy surpluses in the EEC (also known as the EC; currently the EU) coincided with shortages in India in the 1960s, the EEC sought to: maintain the CAP status quo, dispose of its "Butter Mountain", and earn political cachet such as the US enjoyed via PL 480 food aid - while assisting India. Proceeds from "monetised" EEC butter oil and milk powder donations were to be invested in Indian dairy infrastructure. As the largest Asian country with a "dairy culture", India was a suitable setting for Operation Flood (OF), the world's largest dairy development programme ca. 1970- 1996. Because so much debate on aid, trade and development can be illustrated by OF, this thesis chose India as its case study. Claims that dairying could benefit women and minorities attracted World Bank loans, but subjected OF to virulent charges of unmet goals. Worse, warned OF detractors, India could become permanently dependent on Europe’s lactic largess. OF officials countered that they were successfully carrying out their original mission to improve the dairy marketing system of India. Thesis maps and charts based on the Agrostat-PC database (FAQ) show India increased dairy production and consumption significantly during OF. As some comparable countries declined, India moved toward self-sufficiency and status as the world's number two milk producer. Proper pricing by Indian authorities ensured that dairy aid was not a long-term disincentive to farmers and, in the end, increased dairy autonomy. Prospects for "replication" of Operation Flood are limited by a lack of settings suitable for such programmes, and by reduced stocks available for aid. But dairy aid will have a continued role in emergency aid, and in structural adjustment in those poor countries whose food security declines as GATTAVTO liberalises international agricultural trade.