A study commissioned by dairy processors of Foundation for the Future (FFTF) has more than $1 billion in hidden costs in federal nutrition assistance programs and mandatory inflationary adjustments.
FFTF is the National Milk Producer Federation’s proposed dairy reform package, which includes margin protection insurance, a dairy stabilization program and Federal Milk Market Order reforms.
The new study, released today, was done by M+R Strategic Service for the International Dairy Foods Association (IDFA). It examined federal feeding programs such as the Women, Infants and Children (WIC) program. Had FFTF been in place in 2009, more than 178,000 WIC qualifying participants would have lost access to the program unless another $92 million in spending was appropriated. In addition, 50 million fewer pounds of cheese would have been available for commodity distribution programs.
“With one in six Americans currently living in poverty, we need a cost-effective federal safety net more than ever,” says Connie Tipton, IDFA president and CEO. “This report shows that FFTF and Rep. Collin Peterson’s (Dem., Minn.) proposal would impose unnecessary hidden costs on taxpayers and would significantly reduce our nation’s ability to help those who are most in need.”
According to the M+R study, Hidden costs would have totaled $655 million in 2009 alone, and mandatory inflationary adjustments in nutrition programs would have added another $379 million in costs. The increased costs are based on analysis by the Food and Agricultural Policy Institutes that suggests FFTF would increase milk prices 14% and generated an additional $3.4 billion in dairy farm income. Proposed Federal Order changes would likely increase fluid milk prices 51¢/cwt or 4¢/gallon.
Chris Galen, NMPF spokesperson, points out, however, that $250 million will be raised by FFTF’s Dairy Market Stabilization Program and targeted to food banks and charities operating feeding programs for the needy.
"NMPF is a strong supporter of federal safety net programs that help meet the food and nutrition needs of Americans, including WIC and the Supplemental Nutrition Assistance Program. Despite the fact that retail food costs have risen rapidly in the past two years, more people today are receiving some form of government food aid, which is a real-world rebuttal of the premise of this study,” he says.
“Lastly, the other relevant issue at stake here is that any review of safety net programs needs to also look at those affecting farmers. The federal dairy program we now have in place provided little help, even as dairy farmers saw an $11 billion drop in income between 2008 and 2009, and average prices dropped 50¢/gal. For processors to express concern about the potential for a 4¢/gal rise in prices in 2009, even while farmers were experiencing losses many times that size, is disturbing.”
The full study can be read here.