Consumer Groups Oppose Supply Management

May 2, 2013 10:48 AM

They say the Dairy Market Stabilization Program is specifically designed to raise milk prices and would ultimately increase the prices that consumers pay for milk and dairy products.

Source: International Dairy Foods Association

A trio of national consumer organizations expressed their strong opposition to "dairy programs that propose to assist dairy farmers by imposing limits on milk production" in letters sent this week to House and Senate Agriculture Committee leaders this week. The comments refer to the Dairy Market Stabilization Program (DMSP), a supply management provision included in the Dairy Security Act, part of the Farm Bill versions proposed by the committees last year.

"The Dairy Market Stabilization Program is specifically designed to raise milk prices and would ultimately increase the prices that consumers pay for milk and dairy products," the letter states. "We urge that you consider that programs which artificially increase milk prices will hit lower income consumers the most as they spend a higher proportion of their incomes on food than do other consumers."

Consumer Action, the Consumer Federation of America and the National Consumers League urged Senate Committee on Agriculture Chair Debbie Stabenow (D-MI) and House Agriculture Committee Chair Frank Lucas (R-OK) to reject the supply management provision "if that proposal is to be included in the Farm Bill. "

The groups also pointed out in the letter that "Price increases caused by the Stabilization program would negatively impact federal nutrition assistance programs, on which millions of low-income families depend, by increasing program costs and reducing their purchasing power.

"At a time when so many U.S. consumers are having difficulty making ends meet, the last thing they need are unnecessary, artificial increases in the price of staple food products," the letter concluded.

"This is much more than a milk-producer-against-processor issue because supply management will negatively impact the ability of millions of families to buy nutritious milk and dairy products," said Jerry Slominski, senior vice president of legislative and economic affairs for the International Dairy Foods Association. "That’s why a broad spectrum of consumer groups and others have joined IDFA to oppose government policies that artificially raise prices on dairy foods for consumers."

IDFA has been a leading opponent of the supply management provision since its introduction, as it would cause dairy food manufacturers to be directly regulated under the proposed new program; dairy exports would decline while dairy imports would be encouraged; and dairy industry growth and job creation would be stifled. IDFA supports a bipartisan compromise alternative known as the Dairy Freedom Act, which includes all of the elements of the Dairy Security Act except the Dairy Market Stabilization Program.

Copies of the letters can be found here and here


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