We would like to share with you an opposing view we received from Donald E. Niles, DVM. See below for his comments exactly as they were sent to WDD.
As a dairy producer, I know how important dairy policy reform is to our future success and financial viability, and I appreciate that Rep. Colin Peterson is working so hard to make that reform happen by offering his draft legislation. But I am very disappointed to see what is clearly a hidden tax in the Dairy Market Stabilization program included in the plan.
The program is designed to limit U.S. milk production by collecting taxes from dairy farmers when farm milk prices are low. According to some estimates, nearly $400 million would have been assessed against dairy farmers had this program been in effect in 2009. According to Rep. Peterson’s bill, half of this new dairy farmer assessment will be retained by the federal government to offset other spending or reduce the deficit. Dairy does not directly benefit from these collected monies. Also, the basic level of margin insurance is limited to 75% of milk production, instead of 90%. Will this be reduced again? Or eliminated with the $14 trillion dollar national debt?
Are dairy producers aware of this diversion of their monies to Uncle Sam’s general fund?
We have been down this road before. Beginning in 1981, dairy farmers had to pay an assessment on all milk marketed from our farms to help reduce the national budget deficit. Under the proposed plan, the assessments will only come when we are already struggling with high costs of production together with low milk cost. Finally, instead of being paid by all dairy farmers, the ones who will be assessed are those dairies growing in size to maintain their family business and better meet the growing world demand for our dairy products.
And, that’s not all. These proposed reforms would change federal order prices regulations which, according to economic analysis, will increase the farm price for bottled milk and decrease the price of farm milk used for cheese. Wisconsin’s milk is used primarily for cheese, so our producers will be paid less while other regions will get more.
Dairy producers can’t let their longstanding desire for policy reform cloud their vision of the proposed plans. Look carefully and see what is actually there versus what you have been sold in the name of reform.