At the blue corner we have the consumers of milk both big and small who argue that this ban will possibly force them to shut down their factories and lead to milk becoming too expensive for the common man. At the red corner we have the domestic farmers who propose that “if milk is banned, someone is going to bring the money to fund local production of milk”.
At the referees corner we have the government and it seems they are leaning towards banning all imported milk. I know a bunch of 17-year-old introductory micro students who would disagree.
So what will happen if imported milk is banned? First off the price of what we call milk will go way up (seeing as we produce only about 0.1% locally) and will stay up. Will the ban boost local production? Marginally and only marginally because the ban will not stop the local farmers from having to use generators for electricity. It won’t fix the roads which they have to use to transport their goods and it definitely won’t improve the security on their farms all of which are reasons why local production is so low in the first place. It might be a good time to become a smuggler though. Lots of money to be made.
Even though there is room for TEMPORARY trade restrictions to boost local production, what ultimately matters is the cost of producing locally compared with the cost abroad. I can suggest one thing that would probably boost local production a lot more than the (alleged)ban, NEPA.