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Renewal of milk support program faces fight Tuesday, January 4, 2005
WASHINGTON (AP) -- In the heat of the presidential election, President Bush declared his support for a taxpayer-funded milk support program coveted by dairy farmers in the battleground states of the Upper Midwest.
But Congress did not act on Bush's call, and now that the election is over, the program faces an uncertain future. The Milk Income Loss Contract program, or MILC, expires Sept. 30, and will have to compete for scarce dollars at a time when Congress is trying to chip away at the budget deficit.
The program was included in the 2002 farm bill. It pays dairy farmers cash to help them cope with dips in the market price. So far, it has cost taxpayers about $2 billion, but would cost less if milk prices remain high, as they have in the past year.
Taxpayer advocacy groups are already gearing up to fight continuing the program.
"Our members are tired of any subsidy or price control scheme," said Pete Sepp, a spokesman for the National Taxpayers Union. "We'll do whatever we have to, including e-mail efforts and lobbying, to stop it."
The budget deficit is not the only obstacle. The program pays farmers only on their first 2.4 million gallons of milk each year, which translates to about 120 cows. That makes the program popular in the Midwest and Northeast, which tend to have smaller farms, but not so popular in the West, home to much larger dairy operations.
Rep. Collin Peterson, a Minnesota Democrat who has sponsored legislation to extend the program for two years, put the odds of it being renewed at 50-50. As the senior Democrat on the House Agriculture Committee in the next Congress, he said he expects he'll have to cut a deal with Western lawmakers to increase the cap to win support.
"Some of them would like to take the cap off entirely," he said. "That's out of the question. The cost would be three or four times what it is now. I could see us maybe doubling the size."
Jerry Croes, who has 90 cows on a farm in Deer Park, Wis., said the program may have saved his dairy when prices tanked in 2003.
"We have no guaranteed salary," said Croes. "This program is kind of a minimum price so we can get a cash flow."
Croes said he received $1,500 a month from the program in the depressed milk market of 2003.
Opponents of the program argue that saving small dairy farms isn't necessarily good policy.
"The only mechanism we have is very hard, cold, brutal supply and demand -- when there's too much milk, somebody has to kill cows and go out of business," said Jay Gordon, a dairy farmer and executive director of the Washington State Dairy Federation. "This program kept smaller dairies in business that maybe should have gone out of business. It kept more milk on the market that was demanding less milk."
Because of the split among dairy farmers, their trade group, the National Milk Producers Federation, has yet to take a position on renewing the program. Its vice president for communications, Chris Galen, predicts MILC will face "an uphill battle" in Congress.
Galen noted that the federal government already provides a safety net for farmers in the form of the dairy price support system, in which the Agriculture Department offers to buy surplus cheese, butter and milk.
"That's a program that works pretty effectively," he said. "It helps the government clear the market."
Bush endorsed the MILC program during a visit to Wisconsin in October, after Democratic candidate John Kerry claimed that the president planned to scrap it if re-elected. Just a day after Bush's campaign appearance, however, the House dropped the program from an emergency relief bill after objections by House Speaker Dennis Hastert, R-Ill.
At the time, Hastert's spokesman, John Feehery, said the emergency bill was not an appropriate vehicle for the MILC program. Feehery did not respond to requests for comment for this story.
The White House says Bush is still on board.
"The president stands behind his statement in support of the MILC program and looks forward to working with Congress," said White House spokeswoman Jeanie Mamo.
The program's chief Senate backer, Wisconsin Democrat Herb Kohl, said Bush can muscle the program through the GOP-controlled Congress if he wants to.
"I hope he feels the responsibility to redeem his pledge," Kohl said. "I hope it wasn't just an election slogan to get votes."
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