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IDFA's DAIRY POLICY PROPOSALS
Conclusion: The
Right Time for the Right Policies
Dairy farmers, cooperatives and dairy processors all
stand to gain from the possibilities offered by growing
demand for American milk and dairy products. Today’s
dairy industry is primed to capitalize on these opportunities
with the help of more-modern dairy policies that help
farmers protect their income and better manage risk
without creating market distortions. These reforms would
also reward farmers financially for making environmental
improvements and improve the responsiveness of the federal
milk pricing rulemaking process.
As this report demonstrates, continuation of current
dairy policies in the 2007 Farm Bill is not a viable
option. Although today’s dairy industry has advanced
far beyond its precarious position during the Great
Depression, dairy policies have not kept pace. The industry
is diverse, highly productive, and ready to meet new
challenges. This blueprint endorses a set of dairy policy
reforms that follow the guiding principles delineated
in the first chapter. These policy reforms would allow
the industry to follow a path toward future prosperity,
reach its economic potential, and have the benefit of
a more appropriate regulatory structure that allows
the industry and its markets to grow.
The following five recommendations chart the course
for a new, market-driven approach to dairy policy in
the 2007 Farm Bill that will benefit all stakeholders,
including dairy farmers, cooperatives, processors, consumers,
and taxpayers.
- A new payment program for dairy farms that is not
based on price or production, but provides farmers
with reliable income enhancements and incentives to
improve environmental stewardship while improving
U.S. compliance with its global trade obligations.
- Programs that support farmers without distorting
markets or international trade, including: a) establishment
of a revenue-insurance-based safety net for dairy
farms to help protect them against severe economic
downturns; and b) elimination of the current dairy
product import assessment to remove an import barrier
that provides no meaningful benefits, is inconsistent
with our global trade obligations, and invites retaliation
by our trading partners.
- Elimination of restrictions on farmers’ use
of forward contracting of milk sales to enable thousands
of additional dairy farmers to better manage price
volatility.
- A transition out of the contradictory DPSP and MILC
Program to end artificially induced overproduction,
get the government out of the dairy purchasing and
storage business, reduce unnecessary regional divisiveness,
eliminate trade distortions, and increase incentives
to produce for a dynamic marketplace rather than a
government check.
- A blue ribbon commission for reform of the archaic
federal milk pricing system, comprised of industry
stakeholders and experts, to identify and recommend
long-overdue measures for addressing the fundamental
flaws of the FMMOs.
Updating these dairy policies would eliminate trade
distortions, remove disincentives to produce for the
marketplace, and benefit all segments of the dairy industry
and the nation as a whole. The dairy industry is working
hard to adapt to rapidly changing marketplace realities.
These changes will continue. “Ensuring a Healthy
U.S. Dairy Industry: Blueprint for the 2007 Farm Bill”
charts a course for federal policies that can support
the future prosperity of the U.S. dairy industry.
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