Friday, January 4, 2013

Got Subsidized Milk?

In the 1980s and 1990s robotic milking systems were developed and introduced. Milking machines are held in place automatically by a vacuum system. Thousands of these systems are now in routine operation.

Fair Oaks Farms is located in Indiana and is one of the largest dairy farms in the United States. It houses 30,000 cows and produces enough milk to slake the thirst of the entire city of Chicago.

Fair Oaks owns 19,000 acres of land -- enough to accommodate 56,000 football fields. Its cows live in 10 barns as big as airplane hangars -- with 3,000 per facility. 

Tended by a workforce of 400, they produce 250,000 gallons of milk per day -- even without the stimulation of artificial hormones, which Fair Oaks eschews. Waste from the cows is processed in a state-of-the-art digester, producing enough methane to generate all the electricity the vast farm requires.

Future milk production in the country will look a lot like Fair Oaks -- huge operations with enough financial clout to deal on equal footing with dairy processing giants like Dean Foods and supermarket chains like Kroger

What happened to the small family farmers and small dairy producers? Big corporations took over and they now mass-produce.

In 1970, there were 658,000 dairy farms in the U. S. By 2006, according to the United States Department of Agriculture, that number had fallen to 75,000, a drop of an astounding 88 percent. And the plunge continues. But in the same period, the number of mega-farms with more than 2,000 cows rose by 104 percent.

The Republican-controlled House (which is itself controlled by the Tea Party) recently passed a deal that would extend the 2008 farm bill over the next nine months, which allocates spending on food stamps*, crop subsidies and a temporary extension of the Milk Income Loss Contract Program.

(* Why are corporate subsidies always bundled with entitlements for the poor -- a political trade off?)

Rep. Reid Ribble (R-Wisc.), who is Wisconsin's lone member on the House Agriculture Committee, said without the fix, dairy pricing mechanisms used in the 1940s would have kicked in, causing retail milk prices to double in the grocery stores. (OMG!!!!!!!!!)

"The Milk Income Loss Contract program has provided an important safety net for Wisconsin dairy farmers when milk prices drop drastically and feed costs rise. Without further legislative action, the MILC program would have expired and dairy price supports would have dramatically risen, saddling our dairy market with major uncertainty and causing consumer prices to skyrocket."

Did I hear him say "safety net"? A safety net for large corporations, so that they may have "certainty in the marketplace"? **cough-cough-clear throat**

The House and Senate didn't touch a proposed change to how milk is priced through the controversial Dairy Security Act, which was drafted and endorsed by the National Milk Producers Federation, and is a voluntary margin protection program that sets quotas on production levels under certain scenarios in order to control the supply-and-demand ratio.

The conservative Heritage Foundation reported over a year ago that a small group of farm-state lawmakers are proposing an overhaul of dairy subsidies and are planning to submit the Dairy Security Act of 2011 (H.R. 3062) that would "perpetuate producers’ dependence on taxpayers."

What has remained unchanged through seven decades of dairy policy is the price distortions that result from the government’s interference. By limiting supplies to maintain higher prices, consumers pay hundreds of millions of dollars more for milk, butter, cheese, and a variety of other dairy products.

Thus, Americans are taking a double hit on dairy: Tax revenues are used to subsidize producers, and production limits raise the cost of products. 

According to Heritage Foundation, "On the upside, the Dairy Security Act would end the Dairy Product Price Support Program, under which the USDA guarantees the purchase of dairy products to prevent a drop in prices. In practice, the program was dysfunctional."

The bill also retired the Milk Income Loss Contract Program, which provides subsidies to producers when milk prices fall below statutory limits. 

Nearly $1 billion was disbursed under the program between October 2008 and September 2010.

Also targeted for elimination was the Dairy Export Incentive Program, which was established to pay cash “bonuses” to dairy exporters who could not otherwise compete overseas because of the inflated cost of U.S. dairy products.

Tobacco subsidies in the United States totaled $1.3 billion from 1995-2011.

And there's also the $260,000 in farm subsidies that Tea Party Rep. Michele Bachmann received, then lied about on Fox News.

The Republicans and Tea Party radicals always rant about "free markets" in an economy based on supply-and-demand and "trickle-down". They say Obama is a Socialist and is redistributing the wealth, but what are "taxes" if not "a redistribution of wealth"? And what are "corporate subsidies" if not a "redistribution of wealth"? 

The GOP likes Socialism, when it benefits them personally, or benefits the lobbyists that sponsor their election campaigns. The GOP doesn't mind giving taxpayer's money to friends or family members, or to their wealthy donors.

But the GOP doesn't like taking money from rich people to provide food stamps for poor people. To them, that is an assault on their "freedoms" and is "Socialism". To the GOP, that's punishing "job creators".

If the GOP wants to reform "entitlement spending", stop the tax give-a-ways to wealthy farmers and big oil companies, and all the other corporate welfare that taxpayers are forced to pay for - - - first - - - before going after the poor, the sick, the disabled and the elderly with cuts to Medicare, Medicaid, veterans benefits, disability benefits and Social Security.

Fair Oaks Farms is owed by 9 families. If dairy farmers can't make an honest profit (and earn a reasonable living-wage) by milking cows without a "government hand-out", then maybe they should sell their cows for hamburgers to McDonalds -- or go on food stamps and buy powdered milk for their coffee.

If the taxpayers are always going to be held hostage and threatened with higher prices if we don't subsidize big businesses for the production and distribution of goods and services, then we might as well start imposing price controls on all those goods and services and then admit that we're already a Socialist country.

Meanwhile, impoverished lactose-intolerant taxpayers are waiting with bated breath for the latest news.

* Agribusinesses gave $22,186,414 in PAC Contributions to Federal Candidates in 2012 - $1,786,518 from Dairies.

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