Dairy Farmers Reject Subsidies Federation Calls For Elimination Of Federal Program

In a break from other commodity groups who are fighting to keep federal subsidies, dairy farmers say they would be better off without the government’s milk money.

Appearing Thursday in California before a field hearing of the U.S. House Subcommittee on Livestock, Dairy and Poultry, farmers called for elimination of a $300 million program that buys surplus dairy products and subsidizes exports. About half the money comes from taxpayers; the rest is assessed from dairy producers.

“Rather than send the money to Washington, D.C., we want to run our own program,” said Debbie Becker, executive director of the Washington State Dairy Federation. Based in Olympia, the federation represents 700 farmers.

In exchange for eliminating the government assessment and milk purchase program, the federation seeks permission to form a national export board to make overseas sales.

The board eventually would replace the federal Dairy Export Incentive Program, which makes up the difference between the low world price of milk and what dairy processors get for the milk at home.

However, not everyone in the dairy industry agrees with the proposals. At the same hearing, Richard Ziehnert of Elk, Wash., said the government should keep its minimal floor price for milk and retain export subsidies. Ziehnert is president of Seattle-based Darigold Farms, the Pacific Northwest’s largest dairy cooperative, with 1,150 members.

“We urge Congress to make changes to dairy policy gradually,” he testified.

Darigold said it is the largest user of dairy export subsidies in the nation, with more than $300 million in sales in the last three years. Exports go to Mexico, Egypt, Russia and other nations.

Neither dairy group is seeking elimination of federal milk marketing orders, which monthly set a minimum price that bottlers must pay for raw milk. Farmers pay 100 percent of the cost to administer that program; taxpayers pay nothing.

Becker said Congress seems eager to change the dairy program - especially if it will save taxpayer’s money.

“Gunderson told us in November that if we didn’t come up with a plan, we’d end up with nothing,” she said.

Unlike the dairy industry, wheat, sugar and other commodity groups are lobbying hard to retain federal programs that support, or protect, U.S. food production.

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