Guest Columns

Perspective:
Industry Issues

Do we really want Washington running our industry?

Connie Tipton

Connie Tipton is president and CEO of the International Dairy Foods Association. She contributes this column exclusively for Cheese Market News®.

Living and working in Washington, D.C., brings into focus for me the reality of the political process on a daily basis. But even the American Heartland got a taste of that heartburn during the recent debt-ceiling debate. It’s clear to all now that these guys are not who we want to put in charge of decision-making for the dairy industry. Not Congress, not the White House, not the Department of Agriculture.

Mike Marsh from Western United Dairymen wrote recently in a Dairy Today article that it’s’ “imperative to get safety net reforms (for dairy) right.” I couldn’t agree more, and I think the time is right to do just that. Poll after poll shows that Americans are fed up with the gamesmanship and bureaucracy coming out of Washington. So, let’s capitalize on the opportunity to do things right for our dairy industry without inviting continued interference from government and politicians.

How do we do this?

To start, we must come face to face with the fact that the so-called “Foundation for the Future” that has now been introduced as draft legislation in Congress is just a new contrivance of policy with more tricks and twists that we’ll someday have to unravel just as we hope to do now with the outdated price supports and federal order regulations written decades ago. The draft legislation would mandate new programs to collect funds from producer pay checks and give them to the federal treasury. (That sure sounds like a tax on producers to us.) And it would write into law many new complicated provisions for the federal milk marketing orders that could only be changed by the politicians in Congress. These policy proposals are not taking our industry in the right direction.

Our focus right now must be on market growth. Whether boosting our fluid milk industry, still suffering from mounting declines in per capita consumption, or building new customers around the globe, our policies must align with a focus on growth to help markets become the real foundation for the future of our industry.

How about a goal of fewer policies and regulations and more tools for managing volatility? Does that really sound so crazy? We propose an approach that will take the industry in the right direction ­— on a path to growth and opportunity.

We believe getting rid of old programs like price supports is warranted. The Dairy Product Price Support Program continues to encourage production for government storage rather than markets, and it inhibits greater product innovation and market development. It’s time to let it go!

We believe the existing Livestock Gross Margin for Dairy insurance program, giving producers the opportunity to insure the margin between feed costs and milk prices, ought to be better funded and available to all producers who want to use it. But it shouldn’t be imposed or mandated by Congress. Producers can make their own decisions; just give them the tools they need to be efficient and productive, and they’ll make it happen.

We believe new farm savings accounts make sense for dairy producers. These accounts would let them deposit their own profits in good times in order to defer taxes on that money until they take it out when they need it. Again, let the producers, not Congress, decide.

And we believe it’s time to get government out of setting milk prices with complex formulas and unsupportable up-charges for fluid milk processors. The federal milk marketing order program was put in place during the Great Depression for reasons that no longer exist. We favor getting rid of minimum pricing altogether and phasing down and out the premiums or differentials that fluid milk bottlers pay. USDA can gather and publish timely market data and help the industry achieve better tools for price discovery in the marketplace, which would be much more practical and useful than an intrusive price-dictating bureaucracy.

If we could do all of these things, we would be on a course to managing our own destiny, not waiting around each month for tricky government programs that the industry then has to figure out and work around, with more political dues to pay.

Enough is enough. We’ve had too much government interference for too long in the U.S. dairy industry. Give us the tools for farms and businesses to operate effectively in the marketplace and let them succeed in the marketplace.

Please visit IDFA’s YouTube channel to view my new video on dairy policy and the future of the industry. http://www.youtube.com/watch?v=9q_Q33t0ttA.

CMN

The views expressed by CMN’s guest columnists are their own opinions and do not necessarily reflect those of Cheese Market News®.

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