As the congressional “super committee” grapples with deficit reduction, all manner of spending is under scrutiny. A small group of farm-state lawmakers is proposing an overhaul of dairy subsidies that would supposedly reduce outlays by $131 million over 10 years. That is just a quarter of the dollars doled out annually on price controls and income supports for milk producers. In reality, much of the purported savings is illusory, and the restructuring would perpetuate producers’ dependence on taxpayers.
Supporters are planning to submit the Dairy Security Act of 2011 (H.R. 3062) this week to the Joint Select Committee on Deficit Reduction. A similar proposal, part of a broader rewrite of agriculture programs, is already pending before the panel. And while some of the proposed reforms are wise and most welcome—including termination of two costly and unnecessary subsidy programs—the creation of two new ones to take their place undercuts the reform effort.
New Deal, Bad Deal
Existing dairy subsidies and other protectionist policies date back some 70 years, the product of New Deal market manipulations to control agricultural prices. Congress has tinkered with various milk programs over the decades, but the U.S. Department of Agriculture (USDA) continues to “manage” supplies through a jumble of price controls and income supports for farmers.
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