07/08/2013 08:36 am ET Updated Sep 07, 2013

Colombia Milk Producers Feel the Pinch of Free Trade

They lined up with empty Coca Cola bottles, water jugs, mop buckets, ice chests, and plastic cups. It was a hot day to be giving away free milk in the middle of Colombia's second-largest city, Medellin. But the milk producers -- who'd parked their trucks in front of local government buildings, for greater visibility -- said it was a matter of giving the milk away, or tossing it out.

"We don't have anyone to buy what we're producing," said Mariano Restrepo, the head of a dairy farming association in Colombia's Antioquia department. "The industry won't buy, they prefer to import. And the irony is that we have people here in Colombia who are dying of hunger."

The milk give-away on June 11 in Medellin was just the first of several public protests that Antioquia's dairy farmers have planned, in order to draw attention to what they say is a serious crisis facing the dairy sector. Critics say that thanks to several free trade agreements -- one with Mercosur, one with Chile, and another one with the US which became effective in May 2012 -- Colombia's dairy farmers just can't compete with the flood of cheap powdered milk imported from elsewhere.

According to Oscar Cubillos, an economist who works for Colombia's national association of livestock producers, up until 2009, Colombia typically imported 9,000 tons of milk per year. In 2012, however, that number shot up to around 32,000 tons, 70 percent of which was powdered milk or whey products. The first four months of 2013 has already seen another 8,000 tons imported, he says.

Facing a flooded market, many dairy farmers now say it's not worth the cost of producing milk -- the price per liter has dropped between 15 to 20 percent, says Restrepo. Hence, farmers in Antioquia decided they might as well give the surplus away. The handout in Medellin saw some 20,000 liters of milk given away in a single day, according to Restrepo's count. Several more handouts took place in other small Antioquia towns over the next few weeks.

The disgruntled dairy farmers have helped feed wider political tensions in Colombia. Former president Alvaro Uribe used the crisis to attack his successor, Juan Manuel Santos, who (much to the unhappiness of the hardline Uribe) is currently supporting negotiations between the government and guerrilla organization the FARC. "The bankruptcy of the milk producers is thanks to the lack of official support, revaluation, and excessive importations," Uribe tweeted in early June, adding, "Milk producers are on the verge of ruin, especially the smallest ones, as the government negotiates the future of agriculture with terrorists."

Colombia is not a large milk producer in Latin America, but it also one of the most expensive countries to do so, as farmers face high production costs. Nevertheless, in some parts of the country -- especially Antioquia, where Uribe once served as governor -- dairy farming is seen as vital to Colombia's economic and social identity as the coffee trade. Not only is there a national theme park dedicated to coffee, there's one for milk as well -- complete with a giant mechanical cow which visitors can enter and learn about the bovine digestive system.

With an estimated 400,000 farmers making a living off of milk production in Colombia, they are not considered to be a lobby as powerful as the coffee sector. One question, however, is whether the unhappy milk farmers could cause as much trouble for the state as coffee producers did earlier this year. Upset over the falling price of coffee beans, producers held a two-week strike national strike in February, clashing with anti-riot police and blockading highways. Just like the milk producers, the coffee farmers argued that the government should aid their struggling sector.

It was an ugly situation. Considering how much the ideal of the small coffee producer is so central to Colombia's image of itself, there was an uncomfortable symbolism to the violent clashes between farmers and security forces.

So far, the Santos government appears to have taken steps to make sure that what happened with the coffee sector is not repeated with the dairy farmers. The Ministry of Agriculture sat down with industry representatives in mid-June, and committed to providing aid to milk producers.

There are still a few grumblings over whether the government will follow through with its promise. "People are really desperate," said Restrepo, who said that the more intense protests -- including highway blockages -- are not of the question if things don't start improving, and fast. "This really has the potential to explode into a social crisis."