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IDFA Opposes Bill Designed to End Hauling Costs for Farmers

Dec 04, 2009

U.S. House Representative Michael Arcuri (D-NY) (pictured) introduced a bill on November 19 that would eliminate all hauling costs for milk producers and transfer them to processors. IDFA opposes the bill, saying it would further complicate an already complicated pricing system and could end up hurting instead of helping farmers.

Currently, farmers in all agricultural sectors are responsible for transporting their products to market and paying related fees. The bill's author and three sponsors - Reps. Joe Courtney (D-CT), Christopher Lee (R-NY) and Tim Holden (D-PA) - say they want to shift the "burdensome" hauling fees to processors as a way to help dairy farmers keep their costs down.

"If this bill passes, the make allowance in the pricing formula will surely be changed to reflect that processors are now paying that cost, which will result in lower regulated milk prices for all farmers," said Jerry Slominski, IDFA senior vice president of legislative and economic affairs. "We need to reform our milk pricing system but need to keep our eyes on the big picture, not on the individual pieces of the puzzle."

IDFA also believes the bill will have a perhaps unintended effect. It will clearly create a disincentive for processors to buy milk from small dairy farms, particularly those located farther from processing plants, on rural roads or with less accessible farmsteads. If processors are forced to pay hauling charges, Slominski said it's natural that they will try to keep those costs to a minimum.

The bill, H.R. 4117, has been referred to the House Committee on Agriculture, which is chaired by Rep. Collin Peterson (D-MN).

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