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Statement of Connie Tipton, IDFA President and CEO, to Chairman and Majority Members of the House Committee on Small Business

Feb 16, 2012

Roundtable on "The Interests of America's Small Businesses in the Next Farm Bill" 

(Washington, D.C. – February 16, 2012) "Thank you for the invitation to discuss the Farm Bill and its impacts on small businesses. IDFA represents the nation's milk, cheese and ice cream manufacturers – both large and small. It is a common misconception that IDFA represents just large companies; however, over half of our dairy manufacturing companies are small businesses. We appreciate the openness of this committee to hear from our members.

"Most people are surprised to learn about the level of government intervention in the dairy industry and milk markets – and this intervention impacts our small members as much as, if not more than, our large ones.

"In most areas of the country, milk and dairy product manufacturers are still bound by Federal Milk Marketing Orders – an archaic, bureaucratic system that requires them to pay regulated prices based on monthly formulas and how they use the milk. These regulations were designed to address problems of nearly a century ago and their primary impact today is to stifle innovation and growth of the dairy industry. Simply put, our milk pricing regulations are contrary to the traditional principles of a free market economy. IDFA has proposed that pricing regulations be phased out over the next five years.

"The last time Congress tried to dismantle these regulations was in 1998 – by Representatives John Boehner (R-OH) and David Obey (D-WI). Recently Representatives Joe Walsh (R-IL), who is on this committee, and Judy Biggert (R-IL) introduced a bill to do the same – H.R. 3372. It has been endorsed by Citizens Against Government Waste, and I urge you to add your names as co-sponsors.

"We are very concerned that the next Farm Bill will move our industry in the wrong direction. Dairy cooperatives are backing a bill sponsored by Representative Collin Peterson (D-MN), ranking member of the House Agriculture Committee, that would codify and increase the complexity of our milk pricing regulations, instead of eliminating them.

"In addition, his bill would impose an entirely new regulatory burden on dairy processors designed to periodically limit milk production. This direct government intrusion into dairy markets is euphemistically called "market stabilization," but what it really does is require businesses, large and small, that buy milk to withhold payments from farmers and send the checks to the U.S. Department of Agriculture instead. We ask that you work with dairy manufacturers, and some forward-thinking producers, to oppose production limits for the dairy industry.

"Thank you again."

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The International Dairy Foods Association (IDFA), Washington, DC, represents the nation's dairy manufacturing and marketing industries and their suppliers, with a membership of 550 companies representing a $110-billion a year industry. IDFA is composed of three constituent organizations: the Milk Industry Foundation (MIF), the National Cheese Institute (NCI) and the International Ice Cream Association (IICA). IDFA's 220 dairy processing members run more than 600 plant operations, and range from large multi-national organizations to single-plant companies. Together they represent more than 85 percent of the milk, cultured products, cheese and frozen desserts produced and marketed in the United States.

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