Dairy foods association agrees with Cato Institute call for policy reform

US - The International Dairy Foods Association hailed a new briefing paper, released last week by the Cato Institute, calling for fundamental U.S. dairy policy reform.
calendar icon 15 November 2006
clock icon 2 minute read

The Cato Institute is the first public policy organization, or "think tank," to tackle dairy policy in the lead-up to the 2007 Farm Bill. The institute's briefing paper, "Milking the Customers: The High Cost of U.S. Dairy Policies," highlights weaknesses in current U.S. dairy policies and demonstrates how existing programs have a minimal and conflicting role in supporting prices for farmers.

"The experts at the Cato Institute have concluded that today's dairy policies will not help dairy producers and processors meet the challenges of tomorrow," said Chip Kunde, IDFA senior vice president. "This call should inspire us to initiate a smooth transition away from current outdated and conflicting policies to one, national policy that provides critical support to all producers but allows free market opportunities to flourish."

The Cato study provides background on the history and objectives of U.S. dairy programs and describes how the various components create market distortions, generate surplus production, and are costly to the government, the industry and consumers. The Cato experts recommend eliminating the Dairy Price Support Program, because removing it will have little impact on the industry and will significantly benefit global commerce.

The paper also shows how dairy policies have not kept pace with the industry, hampering dairy's ability to capitalize on new growth opportunities.

"These outdated policies are stifling innovation and irritating our trade partners and are egregiously out of date with modern dairy farming," the paper states.

"The Cato Institute joins a growing chorus of voices calling for a transition of U.S. dairy programs. Agriculture Secretary Johanns echoed this sentiment last week in his speech to dairy producers at the National Milk Producers Federation meeting in Las Vegas," Kunde said.

Johanns told the gathering of dairy producers that in order to increase market access, the United States needs to adopt policies that prevent World Trade Organization (WTO) challenges, encourage a level playing field and provide an opportunity for dairy producers to sell more products in the export market.

Source: agprofessional.com

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