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AEI Paper Says Supply Control Would Tax Farms, Increase Volatility

Jul 15, 2011

The American Enterprise Institute today released a white paper on dairy policy that echoes the growing chorus of organizations opposed to milk supply control measures proposed for the 2012 Farm Bill. The paper, "Milking Consumers and Taxpayers: The Folly of US Dairy Policy", was authored by Joseph V. Balagtas, an associate professor in the Department of Agricultural Economics at Purdue University.

Balagtas writes, "In particular, proposals for supply management are especially misguided. Experience with such programs around the world, as well as evaluation of the specific proposals, suggests that supply management would increase, not reduce, price variability for dairy farms and tax the most productive, vibrant farms."

"It's clear that policies that restrict free markets are damaging to the dairy industry," said Jerry Slominiski, IDFA senior vice president for legislative affairs and economic policy. "National Milk's Dairy Market Stabilization Program will hurt our growing dairy exports at a potential cost of thousands of American jobs."

The paper is one of 12 authored by the Institute on the 2012 Farm Bill.

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