and the alternative? Milking polar bears?
To compare, Canada has 1M dairy cows for 35M population, Norway - 300K for 5M population (Norway is self-sufficient milk producer and exporter of dairy products). Giving the health benefits of dairy (incl. in cold climate areas, for children and elderly) i'd say it is good investment, not "unthinkable subsidy".
More on the Canada's (usually one would think of it as a pretty reasonable country) "subsidy-less" approach - http://en.wikipedia.org/wiki/Dairy_farming_in_Canada#Supply_... :
"Dairy farming has been subject to the system of supply management since the 1970s. It restricts the supply of milk by limiting and controlling the amount produced domestically and starkly limiting imports with high tariffs. With a restricted supply, the prices increase, increasing profits for the farmers.[4] Though this system allows the federal and provincial governments to avoid subsidizing the farmers directly, consumers instead subsidize dairy farmers in through artificially high prices paid for groceries.
...
To keep supply low and prices high, it has been made deliberately difficult to become a new dairy farmer in Canada. Because the dairy industry is so lucrative, the right to own a single dairy cow is worth $28,000 (this does not include the actual price or value of the cow itself)
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