The Effect of Economic Partnership Agreements: on the Dairy Sector in Zambia

Zambia is negotiating an Econmic Partnership Agreement (EPA) as part of a regional group (the East and Southern African Group or ESA group) with the European Union (EU). The potential of significant import competition from EU dairy products poses a real threat. The Dairy Sector, as an infant industry, is characterized by many small scale farmers (many in rural areas), and the production of milk for commercial purposes is relatively new (most dairy farming had been subsistence or for sale in nearby locations). An infant industry faced with significant competition may encounter challenges and many smaller producers may well exit the market. This situation is compounded by the fact that the EU offers support to domestic agricultural production under the Common Agricultural Policy (CAP). Dairy products are, therefore, heavily subsidized and even if dairy production in Zambia were internationally competitive, it would find it very difficult to competite with subsidized imports from the EU. The analysis uses the grounded theory approach through responses from various stakeholders. The book could be provided to policy makers in Zambia as well as international trade theorists!