In testimony presented during a Senate hearing last week, the president of Citizens Against Government Waste, Tom Schatz, highlighted examples of what he called pervasive government waste and outlined the need to reform federal agricultural programs, including dairy and sugar.

Schatz told members of the Senate Subcommittee on Federal Spending Oversight and Emergency Management that the Federal Milk Marketing Orders are “one of the last remaining areas of direct government intervention in food prices. As such, they have a substantial impact on hundreds of millions of U.S. consumers.”

He explained that the pricing system was adopted during the Great Depression to ensure an adequate supply of fluid milk, adding, “Today, that mission has been fulfilled, and the continued existence of FMMO milk pricing regulations is no longer in the best interests of consumers and taxpayers.”

Sugar Program Distorts Free Market

Schatz also called for an end to the U.S. sugar program, saying it distorts the free market and keeps prices significantly higher than necessary for consumers and taxpayers.

“The U.S. sugar program could accurately be described as an outdated, Soviet-style command-and-control program that uses price supports, prohibitive tariffs, import quotas, guaranteed loans and domestic marketing allotments to artificially inflate the price of sugar,” he said. “The sugar program has caused the price of sugar to be about 40 percent higher than the world price, resulting in increased costs to consumers of $3.5 billion annually between 2009 and 2012.”

Schatz also described how sugar producers forfeited $152 million worth of sugar to the U.S. Department of Agriculture in the fall of 2013. He noted that the Congressional Budget Office forecast in March that the U.S. sugar program will cost taxpayers an additional $115 million over the next 10 years.

Schatz made his comments during a hearing titled “Wasteful Spending in the Federal Government: An Outside Perspective."

• Read his full testimony here.
• Watch a video of the testimony here.

Others who testified during the hearing were Romina Boccia of The Heritage Foundation, Chris Edwards of the Cato Institute, Steve Ellis of Taxpayers for Common Sense and Donald Kettl of the University of Maryland.

IDFA’s Positions on FMMO and U.S. Sugar Program

IDFA is working to persuade Administration officials, consumer organizations, taxpayer protection advocates and others in the dairy industry that now is the time to move away from the federal milk pricing system and to allow milk to flow to its highest value use as dictated by market forces, not regulations.

IDFA opposes the federal sugar program because it artificially manipulates sugar supplies, creating higher costs for dairy companies and increased prices for consumers.

For more information about FMMOs, contact Ruth Saunders, vice president of policy and legislative affairs for IDFA, at rsaunders@idfa.org.

For more information about the U.S. sugar program, contact Beth Hughes, director of international affairs for IDFA, at bhughes@idfa.org.