IDFA Opposes Senate Effort to Expand MILC

IDFA is urging members of Congress to reject legislation introduced on February 3 that would double the size of the Milk Income Loss Contract (MILC) subsidy, an expensive and divisive program that has already cost American taxpayers about $2 billion. Introduced by Senator Norm Coleman (R-MN), the bill (S. 273) would extend MILC through September 2007 and would increase the cap contained in the subsidy payment formula to 4.8 million gallons per year.

"Making MILC bigger won't make it better, but it will make it even costlier," said Chip Kunde, IDFA senior vice president. "At a time when the nation needs to hold the budgetary line, this legislation would pour billions of dollars in new spending into a program that just doesn't work as national dairy policy."

The new bill was introduced one day after President Bush's State of the Union address, in which he repeated his call for the government to cut the national deficit in half by 2009 by curbing new spending. In addition, the bill comes just four months after the U.S. Department of Agriculture (USDA) concluded in a groundbreaking report that MILC actually depresses the farm milk price paid to U.S. producers, an effect completely contrary to its intent. MILC has no consensus of support among the national dairy producer community due to the program's effect on prices and its regional divisiveness.

The legislation's introduction was covered by the national media, including an Associated Press (AP) article that noted that "the program does not enjoy support from every region... [The cap increase] makes the program popular in the Midwest and Northeast...but not so popular in the West." IDFA released a press statement last week to address the bill's introduction. (Click here to review that statement.)

As a more productive step forward, IDFA is calling for a deliberate examination of all dairy programs, including a review of the USDA report and the concerns it raises about the incompatibility of MILC with other government dairy programs.

"Congress needs to seek the advice of industry experts on alternatives to these programs that are less market disruptive, compliant with world trade obligations, and help all farmers better manage market fluctuations," said Kunde.

In addition to Senator Coleman as the primary sponsor, 27 senators co-sponsored S. 273, primarily from midwestern and northeastern states; IDFA expects a companion bill to be introduced soon in the House of Representatives. IDFA urges its members to contact Congress to express opposition to this legislation. To assist with this process, IDFA is offering a sample letter that can be downloaded by clicking here (.doc) or sent via IDFA's online e-advocacy tool by clicking here.

Posted February 7, 2005