53. The preceding discussions have shown that domestic milk production and dairy imports (aggregated) have an inverse relationship - i.e. an increase in one has a depressing effect on the other. Although the magnitudes in both cases are low, this relationship indicated prima facie that a policy of encouraging domestic milk production would seem to be an appropriate one. Yet it might be argued that Nigeria should not try and expand the production and marketing of fresh milk if it is relatively cheaper to import than to produce it locally. This is the traditional argument of comparative advantage. Although this is a relevant factor to consider, the national desire for self-reliance and self-sufficiency is driving most developing nations to expanding domestic production without really going into detailed consideration of the principle of comparative advantage. In the case of Nigeria, preliminary cost analysis (Nwoko, 1985a and 1985b) has shown that it is comparatively cheaper to produce fresh milk domestically than to import dairy products. This preliminary finding is still subject to further detailed analysis. There are such other side benefits of domestic production as employment generation and foreign exchange savings, which have not yet been included in the analysis of comparative advantage. For a country like Nigeria, with mass urban and rural unemployment and a declining foreign exchange base, these effects are likely to provide additional support to the case of domestic milk production and make it possible for government policy to support domestic producers rather than ban dairy imports.
