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Amid Debt-Ceiling Discussion, Dairy Policy Debate Intensifies

Jul 27, 2011

While President Obama and congressional leaders continue to squabble over debt-ceiling discussions, debate has intensified over Representative Collin Peterson's (D-MN) recently released draft legislation that features heavy elements of the National Milk Producers Federation's Foundation for the Future. As talks continued over the debt-ceiling, rumors linked the inclusion of Peterson's legislation to any plausible deal.

Peterson dismissed the rumors but said he remains hopeful that he will get dairy legislation through the House Agriculture Committee in advance of the 2012 Farm Bill. Peterson's bill is unlikely to be a part of a debt-ceiling deal because the draft bill would raise revenue from the dairy industry to cover the cost of the bill's proposed margin insurance program. However, new rules of the House of Representatives for the 112th Congress referred to as "Cut-Go" require dollar-for-dollar offsets for any new spending. Cut-Go is intended to ensure that new taxes are not used to cover increased spending.

Americans for Tax Reform and the National Taxpayers Union (NTU) each recently posted letters to Congress, urging lawmakers to avoid tax increases and fiscal gimmicks, such as milk supply control, in debt-limit negotiations. Americans for Tax Reform said the proposed milk supply-control initiative "would continue government's intrusive role in the dairy market, inflate consumer prices, constitute a new spending program, and - worst of all - act as an effective tax on farmers."

The National Taxpayers Union agreed, saying "dairy-market manipulation" would "raise prices (by billions) for consumers, increase federal expenditures, discourage dairy manufacturers from investing toward expansion and even lead to layoffs in industries affected by higher costs for milk."

In other developments, the American Farm Bureau Federation implicitly offered support of a temporary supply management program but sent Peterson a letter urging him to consider several changes to the legislation. Similarly, the National Farmers Union is split on certain elements of the legislation, supporting supply management, while opposing the elimination of the Milk Income Loss Contract (MILC) program.

IDFA remains steadfastly opposed to any supply management legislation, as it would establish limits on milk production, inhibit the United States export market and impose new government mandates on the industry.

Until Peterson officially introduces his bill into Congress, talks remain speculative.

For more information, contact Ruth Saunders, IDFA vice president of policy and legislative affairs, at or (202) 220-3553.

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