Subcommittee Considers Milk Marketing Reform Legislation

Jun 24, 1999

Today the House Agriculture Subcommittee on Livestock and Horticulture, led by Chairman Richard Pombo (R-CA) reviewed H.R. 1402, legislation to require the Secretary of Agriculture to implement the Class I milk price structure known as Option 1-A as part of the reform of Federal Milk Marketing Orders.

"Most importantly, I want to know what this legislation means for the long-term viability and competitiveness of American dairy; does it move us from a government- directed to a market-oriented approach; and how could this pricing policy affect other agricultural commodities?" Pombo said.  "Only when these questions are asked and answered can Members make an informed decision on a proposal that is so vitally important to our nation's dairy farmers and processors."

Today's hearing was another step in the ongoing process of reforming America's dairy industry as outlined and mandated under the Federal Agriculture Improvement and Reform Act of 1996, commonly known as the Farm Bill.  Previously, the Subcommittee held a hearing on the Administration's Final Decision for the reform of Federal Milk Marketing Orders at which time Chairman Pombo asked all interested and involved parties to meet and agree on one, single, unified model to analyze the economics of dairy reform.

In response, the Food and Agricultural Policy Research Institute (FAPRI), the US Department of Agriculture, Cornell University, Texas A&M University, and the University of Wisconsin have endorsed the model of analysis that was presented by FAPRI this morning as a reasonable and useful economic model.

The regional and political support for H.R. 1402, introduced by Rep. Roy Blunt (R-MO) has signaled that the Department of Agriculture's so-called "final decision" is -- in fact -- far from it.  This bill would change the price formulation for Class I milk from that USDA's proposal.  Support for this bill has been broad, and today the Subcommittee heard from Members of Congress, industry groups, dairy farmers and Minnesota's Governor Jesse Ventura to help gauge how deep is that support, how rational, how reasonable, and how far-sighted.

"We have an obligation to provide a framework and a road map for America's $50 billion dairy industry," Pombo said.  "One way or another, we need to move this process forward allowing adequate time for policy implementation with the minimal amount of disruption."

Pombo represents the Eleventh District of California, which includes San Joaquin County and a part of Sacramento County.