Tuesday, November 29, 2011

Dairy Farmers Want Changes in Government Subsidy Programs

Here’s a Better Idea, Why Not Change It So That It No Longer Exists

Dairy farming is a hard and difficult and high risk business.  First of all there are the cows, and large parts of dealing with cows are not very pleasant.  Then there is the milk, whose prices fluctuate wildly.  And also there is the cost of feed, particularly corn whose price can be pushed up because the government feels that subsidizing ethanol production made from distilled corn is good policy and good politics (well they got part of that right.

So the dairy farmers want government help, which they get.  Now they want to change the program.

Now, dairy farmers across the country are pushing to overhaul federal dairy policy in a way they say would save the government money while preventing such a price bust from happening again.

Led by their trade group, the National Milk Producers Federation, dairy farmers want to retire the current price-support program, saying it doesn't keep prices of milk high enough to cover the surging cost of corn they feed their cows. Instead, farmers want federal subsidy checks tied to declines in their profit margin.

Now this seems odd, how can a program which saves the government money help the dairy farmers who receive that money.  Oh, here’s how.

The catch: The idea would likely raise the prices that consumers pay for milk and other dairy products.

To keep the government costs of the new subsidy lower than those of the current program, the U.S. would have to get in the business of managing the nation's milk supply. The proposed overhaul would force dairy farmers to cut production when milk prices fall toward unprofitable levels—a throwback to the way some crop-subsidy programs worked before the 1990s.

Some economists figure U.S. consumers would have paid billions of dollars more for dairy products in 2009 had the change been in place.

Hasn’t the time come for the government to get out entirely of the dairy regulation, control, and subsidy business.  This is not 1933.  Yes dairy farmers may suffer, and a way has to be found to support a transition so that existing dairy farmers are not severely harmed or immediately forced out of business, but that should be possible.

It should be possible because Conservatives now control much of the Congress and lower government spending and letting free markets operate as free markets is what they believe in.  So look at the cited article and notice how many Conservative Republicans are supporting an end to the dairy program. 

What, you found none?  Not even one Presidential candidate? Well that’s the problem with Conservatives isn’t it.  There’s never one around when you need one.  Is it because these Republicans tend to represent farm states and rural areas and put their re-election goals ahead of everything else, even their principles?  No that can’t be it. 

No comments:

Post a Comment