Groups debate costs, benefits of supply management plans
By CAROL RYAN DUMAS
The Milk Producers Council of California is promoting a national supply-management proposal contained in legislation introduced in both the House and Senate.
Other groups say the legislation, introduced by Rep. Jim Costa, D-Calif., and Sen. Bernie Sanders, I-Vt., would restrict exports and invite milk imports.
Those opposed to the proposal "absolutely are not understanding what the program is," said Syp Vander Dussen, president of Milk Producers Council of California. "No one will tell any producer what to do, ever."
The council spent three years helping to design the program.
The plan doesn't involve quotas, which he said most growers oppose. Instead, it would offer a quick and clear market signal to dairymen so they could manage their operations based on current demand, he said.
Under the plan, every quarter the USDA would set an allowable year-over-year production growth rate and assess a market access fee for producers who want to expand above that. The access fees would be collected during the first year of expansion and distributed to producers who held their production to allowed levels.
The amount of the access fee hasn't been determined. The amount paid to farmers who hold production steady would vary depending on the size of the fee and how much production increased.
"But it could be a lot higher or a lot lower, depending on the amount of expansion," he said.
Other supply-management proposals being floated, including one by National Milk Producers Foundation, would deduct a portion of a producer's milk check on surplus milk.
Tom Mendes, a Riverside, Calif., dairyman who served 11 years on the California Dairies Inc. co-op board, said the legislation is a step backward. All other commodity industries have moved away from the supply-management philosophy.
The bill would keep U.S. dairy industry from being competitive, hinder exports and invite imports, he said.
"You can't restrict supply globally," he said. "It's a usage deal. You should increase usage, not restrict supply."
"There are no restrictions; you can do anything you want," Vander Dussen said. "Our program simply provides a slow-down, caution sign when we have too much milk and a green light, go like hell when we don't."
"We need continued growth in our production. We're just not able to have everyone grow at the same time without crashing our prices," he said.
While Western United Dairymen didn't take a stand on the Costa-Sanders bill, one of the problems with the proposal is the lack of support, said Michael Marsh, Western United's CEO.
"Any type of real change will come in the farm bill," he said.
Western's board of directors on Sept. 10 voted to work with National Milk Producers Federation in its Foundation for the Future plan.