[Congressional Record Volume 141, Number 146 (Tuesday, September 19, 1995)]
[Extensions of Remarks]
[Page E1804]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




[[Page E1804]]


                       DAIRY FREEDOM ACT OF 1995

                                 ______


                          HON. THOMAS E. PETRI

                              of wisconsin

                    in the house of representatives

                      Tuesday, September 19, 1995

  Mr. PETRI. Mr. Speaker, today I am introducing the Dairy Freedom Act 
of 1995. This bill deregulates the diary industry within 5 years by 
eliminating the Federal milk marketing order system on January 1, 1996, 
reducing the Federal dairy price support over the next 4 years 
beginning January 1, 1996, and then eliminating the price support 
program on January 1, 2000. It also directs the first savings realized 
through this plan toward eliminating the current dairy assessment paid 
by farmers, then applies all subsequent program savings to reduce and 
eventually eliminate the taxpayers' contribution to the program.
  Through an oppressive and costly system of Federal milk marketing 
orders, the Federal Government currently fixes the price of 70 percent 
of the raw milk produced in the United States according to how the 
processor intends to use it. The Federal order system also pools and 
then redistributes milk revenues among farmers by computing a blend 
price which all processors are required by law to pay to farmers. And 
through the dairy price support system, the Federal Government attempts 
to support the price of raw milk by entering dairy product markets and 
buying butter, cheese, and nonfat dry milk at minimum guaranteed 
prices. This creates artificial demand in the market for dairy products 
and effectively encourages overproduction of certain products due to 
the fact that the Government is required by law to purchase them.
  The fact that this program uses centralized government planning 
methods in an attempt to micro-manage the dairy industry is bad enough. 
But what I and many, many folks in the upper Midwest find truly 
despicable about it is that it effectively discriminates against our 
dairy farmers by holding their milk prices down, while keeping prices 
artificially high in other parts of the country. It is ironic and sad 
that this program--supposedly created to help dairy farmers--is now 
substantially to blame for driving more than a few of them out of 
business.
  In addition, this program continues to cost farmers, taxpayers, and 
consumers hundreds of millions of dollars each every year. Farmers are 
required to pay an assessment in order to help defray the cost of 
purchasing surplus dairy products through the Federal dairy price 
support system. Rather than allowing the free market to counter 
overproduction of certain dairy products, the current program 
effectively sets floor prices and taxes farmers for part of the cost of 
maintaining those prices by removing manufactured products from the 
market. Taxpayers pick up the tab for most of the program's cost, which 
is expected to total more than $370 million in fiscal year 1996 if the 
program remains unchanged. Finally, consumers pay for this program at 
the checkout counter when they purchase dairy products or other food 
products made with milk which has been priced artificially high by the 
Federal Government.
  I feel very strongly that any Federal dairy policy which continues to 
prevent the proper functioning of the free market in the dairy 
industry, and which effectively discriminates among farmers on a 
regional basis, is unacceptable. Instead of keeping this program intact 
and reauthorizing some semblance of the status quo, I propose today 
that the Congress take action to free America's dairy industry by 
incorporating my Dairy Freedom Act into the agriculture reauthorization 
language which is to be included in this year's budget reconciliation 
bill. I urge my colleagues to join me in taking this bold yet long-
overdue step in favor of free markets, lower prices for consumers, less 
waste of taxpayer dollars, and free and fair competition in the U.S. 
dairy industry.

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