Basic Mechanisms of Japanese Dairy Policy and Milk Market Models: A Comparison with United States Dairy Policy

The objective of this paper is to examine the similarities and differences between the dairy programs in the US and Japan and the implications of those programs for development of milk market models. The basic framework of the US and Japanese dsury policies is very similar. Price supports for milk used for manufactured dairy products, classified pricing and revenue pooling, and import quota are major components of both programs. Interesting differences in each component are also present. Price discrimination between fluid and manufacturing milk products must be accounted for in the development of models of the dairy industries in both countries.