Price-Hiking Scheme Hidden In Farm Bill Would Constrict Dairy Production

September 19, 2012 - 2:54 PM

In the midst of this lingering recession, Americans may have doubts about what Congress can do to help repair the economy – but very few would expect Congress to do something intentional to drive up the price of our milk, a classic indicator of economic health and the buying power of the American family.

Yet, your future trips to the grocery store could prove painful as the price of milk is jacked up, higher and higher, affecting all dairy-related products from pizza to yogurt. That is on top of a 2% increase in food prices over the past year PLUS lost job opportunities and the waste of perfectly good potential resources, all thanks to legislation creeping through Congress.

The culprit is a disturbing, Soviet-style, price-hiking scheme called the Dairy Market Stabilization Program (DMSP). Hidden deep within the nearly $1 trillion “Farm Bill” (the Federal Agriculture Reform and Risk Management Act), this provision would force dairy farmers to artificially constrict supply.

While these government “quotas” on milk production increase the cost of milk, and the American people suffer the consequences at the cash register, excess production will be penalized rather than allowed on to the market to relieve costs.  Previous price and supply management policies here in the U.S. have even paid dairy farmers to slaughter part of their herds. To our north Canada has imposed milk quotas with predictable effects – lower production and higher prices.

Government controls like these have even alarmed normally left-of-center advocacy groups like the Consumer Federation of America, and Consumers Union. In a July 19 letter to House Agriculture Committee Chairman Frank Lucas, the two organizations expressed “strong opposition” to “dairy programs that are designed to restrict milk production.” They warned that, “At a time when so many U.S. consumers are having difficulty making ends meet, the last thing they need are unnecessary, artificial increases in the price of staple food products.”

That’s not all DMSP has in store for us. The heavy-handed constraint of milk supplies could reduce resources available for production of a variety of dairy foods, thereby cutting off job creation and reducing exports in the dairy industry.

It’s hard to understand how supporters of this program and their allies in Congress could get away with such a blatant expansion of bureaucratic power on the backs of hard-working families and those with limited incomes for whom food prices are a significant part of the budget. And speaking of budgets, higher prices for dairy items will increase costs for federal nutrition programs, creating yet another potential liability for taxpayers.

They are counting on the density of the Food Stamp-heavy Farm Bill to hide their actions. Which is why two groups, the National Taxpayers Union and the Council for Citizens Against Government Waste, have launched a website at YourMilkMoney.org to spearhead a citizen-driven campaign aimed at stopping DMSP before it harms consumers, taxpayers, and the economy.

It would be devastating to see struggling families stuck in the dairy aisle, having to remove from their shopping carts basic products they rely on, due to the deliberate actions of a Congress that claims to be looking out for them.

Editor’s Note: Douglas Kellogg is Communications Manager for the 362,000-member National Taxpayers Union, the nation’s oldest and largest taxpayer advocacy organization.

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