July 31, 2007

Mexico's agriculture department to implement "aid plan" for dairy producers

The Agriculture Secretariat of Mexico (SAGARPA) is mulling an "aid plan" or give incentives for local milk producers to produce high quality milk as well as the integration of small and medium dairy farmers to strengthen the country's dairy industry, the US Agriculture Department reports in its "Mexico Agricultural Situation and Weekly Highlights".

The programme -- called "Contract Milking" is to have farmers set up a sales contract with dairy producers; if the price established in the contract equals or exceeds 4 pesos (US$0.36), milk producers are to receive 0.40 pesos (US$0.03) per litre subsidy transferred by the processing industry to the milk producers.

According to the USDA, the programme will cover 150 million litres per year in its initial stage and hopefully reach 500 million litres in the near term. The plan is expected to take place in the last quarter of 2007.