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TheStreet Open House

Congressional Dairy Fix Would Still Raise Milk Prices

Dairy Manufacturers and Consumer Groups Oppose New Program

WASHINGTON, Dec. 31, 2012 /PRNewswire-USNewswire/ -- The International Dairy Foods Association (IDFA) stated today that the legislation proposed by Congressional Agriculture Committee leaders would still cause a problem in the marketplace because it includes a controversial new program designed to limit the milk supply. That proposal, championed by Representative Collin Peterson (D-MN) yet resisted by consumer groups, food manufacturers and many dairy farmers, is known as the Dairy Security Act (DSA) and would require the government to intervene in milk markets to manipulate the supply of milk in order to keep milk prices artificially high.

"It is ironic that the threat of higher dairy prices for consumers, caused by the possible implementation of the 1949 Act, is being used to force Congress to pass a new program that will result in higher prices," said Jerry Slominski, IDFA senior vice-president for legislative and economic affairs.

The new program is included in a bill that would extend most existing farm programs for one year; it was placed on the House calendar by House Committee on Agriculture Chairman Frank Lucas (R-OK). That bill completely rewrites U.S. dairy policies, including the new program to control milk production, yet leaves all other agriculture programs unchanged. By insisting on its inclusion in the "fiscal cliff" legislation, its supporters are making it more difficult to pass that important legislation, should leaders come to an agreement on its details.

"The Dairy Security Act is a problem, not a solution," Slominski said. "IDFA supports an extension of existing dairy policies in the current farm bill to give Congress time to complete action on a new five-year farm bill and to allow for consideration of the alternative to the Dairy Security Act offered by Representatives Bob Goodlatte (R-VA) and David Scott (D-GA). We believe that alternative will pass if it is brought to the full House of Representatives for an up or down vote.

"A clean extension of the 2008 Farm Bill will avoid having the 1949 Act become relevant law and allow payments to dairy farmers when milk prices fall. The 1949 Act represents agriculture policies from the past and unless Congress passes a clean extension of the Farm Bill, Secretary Vilsack would be placed in the unenviable position of proposing rules to implement such policies. Although he will be able to delay any increase on consumer dairy prices for weeks if not months, Congress should still take action to avoid that situation," Slominski concluded.

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