Taxpayers Are Dairy’s Cash Cow

DairyTaxpayers Are Dairy’s Cash CowSecretary Purdue spills taxpayer cash to lap up milk.

Agriculture,  | Quick Take
Aug 15, 2018  | 3 min read | Print Article

Looking to make pandering to agricultural commodities great again, and courtesy of authority granted under a 1935 law, Secretary of Agriculture Sonny Perdue announced plans to purchase $50 million of milk for distribution to food banks and school lunch programs. If this sounds familiar, it is. In 2016 the Obama Administration used this same past-its-prime law to hoover up $20 million of cheese in an attempt to prop up prices for producers of milk.

Dairy production is estimated to generate $35 billion this year, so a $50 million purchase is barely a drop in the pail. But the intent is clearly to smooooooth things over with a sector losing export markets in this trade war and which has not received as much federal subsidy as it anticipated from programs created in the 2014 farm bill. For years lawmakers have complained that the Margin Protection Program (MPP) was one of the few farm bill entitlements actually running under budget – unlike other Ag income entitlements, and thus have sought to increase spending on the program until the cows come home. It’s a pursuit that’s resulted in dairy producers benefiting from an additional $1 billion of unbudgeted spending from changes to MPP that were stuffed into the crust of the Bipartisan Budget Act of 2018, changes that make the program free at lower levels of coverage and increase taxpayer subsidies for producers that choose to insure higher margins. Additional changes are proposed in both the House and Senate farm bills.

This latest disbursement of milk money is wholly separate from the $12 billion in hush money the Trump Administration announced it will pour into the agriculture sector to mitigate the economic political damage caused by President Trump’s trade war. By the way, dairy will be one of the beneficiaries of that $12 billion bucket of cash – both as recipients of direct cash payments in the “Market Facilitation Program” and, wait for it, through increased purchases of “surplus” commodities, including milk products, by USDA for distribution to food banks and the school lunch program.

The recent announcement by the USDA is just the latest instance of this administration replacing American trade with taxpayer aid. That is not common sense agriculture policy. That’s curdled policy that works for a handful of special interests at the taxpayer’s and other farmers’ expense, and at a time when we’re already facing a $21 trillion debt with trillion dollar annual deficits looming.