Dairy Aff (ADI)

ADI 08
Fellows
Dairy Aff
Dairy Aff
Dairy Aff..................................................................................................................................................................1
Hingstman 13...........................................................................................................................................................2
Observation 1 - Inherency........................................................................................................................................3
Advantage 1 - Economy...........................................................................................................................................4
Advantage 1 - Economy...........................................................................................................................................5
Advantage 1 – Economy..........................................................................................................................................6
Advantage 2 – Dairy Cartels....................................................................................................................................7
Advantage 2 – Dairy Cartels..................................................................................................................................10
Advantage 3 – Trade Leadership...........................................................................................................................11
Advantage 4 - Veal.................................................................................................................................................14
Advantage 5 – Nutrition Programs........................................................................................................................15
Advantage 5 – Nutrition Programs........................................................................................................................16
T – MPSP is a subsidy...........................................................................................................................................17
MPSP = more subsidies.........................................................................................................................................18
High milk prices = high food prices......................................................................................................................18
AT: Milk Prices Low Now.....................................................................................................................................18
MPSP hurts dairy industry.....................................................................................................................................19
MPSP hurts dairy industry.....................................................................................................................................20
AT: Subsidies key to dairy industry.......................................................................................................................22
Dairy key to NY economy.....................................................................................................................................23
Dairy Key to the Economy....................................................................................................................................24
Dairy not key to the economy................................................................................................................................25
No Trade Leadership Now ....................................................................................................................................26
No Trade Leadership Now.....................................................................................................................................27
Trade Leadership Solvency....................................................................................................................................28
Trade Leadership Solvency....................................................................................................................................29
US trade leadership key to free trade.....................................................................................................................29
1
ADI 08
Fellows
Dairy Aff
AT: Doha collapsed already...................................................................................................................................30

...............................................................................................................................................................................30
AT: International trade arguments..........................................................................................................................31
AT: Small Farms DA..............................................................................................................................................31
Solvency – Milk Marketing Orders.......................................................................................................................32
...............................................................................................................................................................................32
Hingstman 13
2
ADI 08
Fellows
Dairy Aff
Observation 1 - Inherency
The 2008 farm bill extended the controversial Milk Price Support Program, costly American taxpayers billions
of dollars every year
Wolf 2008
(Christopher, Dept. of Agricultural, Food, and Resource Economics, Michigan Dairy Review, “The Dairy Title of the 2008
Farm Bill”, July, https://www.msu.edu/~mdr/vol13no3/wolf.html)
The 2008 Farm Bill was more of the same in many respects. However, several changes may have direct effects for dairy
farmers. Firstly, the Milk Price Support Program was continued but renamed the Dairy Product Price Support Program.
Secondly, dairy imports are to pay check-offs for generic advertising. Thirdly, the US Department of Agriculture (USDA) is
required to expedite the process of amending Federal Milk Marketing Orders. And finally, the Milk Income Loss Contract
(MILC) program remains with the eligible milk per farm increased and a feed cost trigger now included. Changing the name of
the Price Support Program from “milk” to “dairy product” reflects what the program actually does as it is an open offer to
purchase cheese, butter and nonfat dry milk. The intention has been that keeping these products above a certain level will
translate back to a floor on the farm milk price (set at $9.90/cwt for the past several years). When the last World Trade
Organization agreement was set in 1994, the Milk Price Support Program was rated at an enormous $5 billion of support. That
value turned out to be much larger than the actual support as the US milk price determined by market forces has been above
support for most of the period since. This name change may actually affect trade agreements in a positive way by lowering the
calculated effective support level in future agreements although the exact result is unknown at this time. The program also has
trigger net removal levels for cheese, butter and nonfat dry milk that result in product price support reductions. However, the
current price climate is such that the support prices are below cost of production and therefore likely irrelevant. Having
imported dairy products pay a 7.5 cent/cwt assessment means that they will pay half of the 15 cent/cwt assessment that
domestic production pays. This change was in response to the allegation that imports were free-riding on domestic dairy
promotion efforts. The result will be to make imports marginally more expensive and is likely to be of concern in future trade
agreements.
The dairy industry is in decline now – pricing programs have been ineffective at saving farms
Tribune Business News 2007

(Jun 4, Ike Wilson, pg. 1, ProQuest document ID:1282765191, Accessed: 7/30/08)
Most national policies do not address the underlying forces that affect dairy farming, Leathers said. Subsidies to expand dairy
exports would primarily help low cost areas. A discussion of subsidies should consider whether to base subsidy payments on
historical output/participation, or on current decisions. "Are subsidy payments per farm, per cow, per hundredweight of milk?"
he asked. "Do you put limits on who qualifies for a payment, or on the size of payments?" Pricing programs in some states
have not made any difference in the number of declining farms. Dairy farms are declining in all states, he said. Leathers said
most Maryland milk is marketed through cooperatives, and state pricing programs do not influence what a dairy farmer
receives from the co-op. How the price of milk is derived is a mystery to dairy farmers, said Fry. "Milk pay formulation is so
complicated and the only reason it's that way is to keep everybody in the dark. Nothing is more misunderstood than the way
milk is paid for," Fry said. He said milk cooperatives decide on milk prices for the farmers but Fry said he's not sure if the
cooperatives are working for the dairy farmer's interest. "I think the co-ops are working for us but I'm not sure," Fry said.
Delaware has 90 dairy farms, Hawaii 30, compared to Maryland's 630. "A small number of dairy farms can survive in an area
without complete collapse," Leathers said. Fry said local dairy farmers put their dollars back into the local economy. He said
that for every dollar a dairy farmer pays in taxes, he gets 50 cents in services. "If we lose the dairy industry, that's a
tremendous amount of dollars we'll lose," Fry said. Gareth Harshman, president of the Frederick County Farm Bureau, said he
left the dairy industry in 2003 for replacement heifers and crop because it was not economically feasible to continue.
3
ADI 08
Fellows
Dairy Aff
Plan: The United States federal government should substantially reduce its agricultural support for dairy by
eliminating the Dairy Product Price Support Program.
Advantage 1 - Economy
The Milk Price Support Program undermines the success and growth of the dairy industry
Barlas 2007
(March, Stephen, a full-time freelance Washington editor for business and trade magazines since 1981, Dairy Field Vol. 190, Iss. 3;
pg. 10, 1 pgs, ProQuest document ID: 1256584631, Accessed: 7/30/08)
The milk price support program is kind of silly when you think about it. The USDA buys mostly nonfat dry milk when milk's
price dips below $9.90 per hundred-weight for milk testing 3.67 percent butterfat. But right now, milk prices are high, so not
much milk is being purchased. However, just keeping the program in place hurts dairy product manufacturers, and in two
ways. First, few suppliers of such things as high-grade milk protein concentrate are available locally because they are worried
the federal government could jump into the market as a competitor at any time. So makers of ice cream and cheese have to go
overseas to find some of those types of ingredients. Second, the World Trade Organization considers milk price supports an
unfair federal subsidy, and that makes it harder for the United States to argue for more access to foreign markets for dairy
products. While it is refusing to budge on price supports, the Bush administration would make changes to the MILC program
by limiting payments to farmers earning less than $200,000 in adjusted gross income. The current limit is $2.5 million a year.
And the size of those payments would decline from 34 percent of the difference between $16.94 per hundredweight and the
Class I price in Boston in fiscal 2008 to 20 percent in FY 2013-17. However, just maintaining the MILC program, even at a
reduced level, maintains the crazy relationship between it and the price support program, where the USDA buys heavy
quantities of nonfat dry milk, butter and cheese (mostly NFDM) when the price of milk is low at the same time it is making
direct payments to those same milk producers via the MILC program. That spells milk price volatility, which is doubly
dangerous to proprietary dairy processors because they are not allowed to forward contract with milk suppliers. Kunde thinks a
better safety net for milk producers would be one where the price support program was eliminated entirely, and the MILC
program replaced with a different direct payment program based on two components: a milk producer's revenue, as the
administration has proposed to do with other commodity programs, perhaps tied to the number of cows on a farm; and a milk
producer's nutrient management plan.
4
ADI 08
Fellows
Dairy Aff
Advantage 1 - Economy
The Dairy industry is key to the US economy
California Milk Advisory Board, No Date

(Dairy Management Inc., National Milk Producers Federation, Pennsylvania Center for Dairy Excellence,
http://www.dairyfarmingtoday.org/NR/rdonlyres/2AA74EA3-9236-422A-A4DE-AA39A918E772/0/economicfactsheet.pdf)
America’s dairy industry is more than milk. It’s jobs and economic activity for the people of our country. The U.S. is home to a
mixture of large and small dairy farms — both of which contribute to the local economy by supporting local businesses and the
community tax base. America’s dairy industry is an important contributor to our nation’s overall economy. Each dollar a dairy
producer receives in milk sales generates more money for the local economy. • More than 60,000 U.S. dairy farms provide
milk, cheese and yogurt to the U.S. and other countries. About 99 percent of all dairy farms are family-owned. • On dairy
farms, the average herd size is 115 cows. o Seventy-seven percent of dairy farms have fewer than 100 cows. Farms with more
than 100 cows produce 78 percent of the milk. • The average U.S. cow will produce 6.2 gallons per day over the course of a
typical year. That’s more than 2,275 gallons a year. • U.S. dairy farms produce almost 177 billion pounds of milk annually. •
There are dairy farms spread across all 50 states and Puerto Rico. Most milk only travels about 100 miles to get from the dairy
to your local grocery store. • California produces the most milk — 21 percent of U.S. production. • Dairy is the number one
agricultural business in California, Wisconsin, New York, Pennsylvania, Idaho, Michigan, New Mexico, Vermont, and Maine.
In California alone, dairy is a $31 billion industry employing 400,000-plus people. • Dairies create a ripple effect on both the
agricultural economy and the economic well-being of rural America. When a dairy farmer spends money locally, it creates a
multiplier effect of more than two and a half times the original dollar spent. Milk doesn’t stay on the farm - where milk goes,
jobs follow. • Dairy farmers purchase machinery, trucks, fuel, and more from local companies, which generates jobs and
income. • Our dairies create jobs for people who grow and ship feed for our cows, as well as for veterinarians, insurance
agents, accountants, bankers, and others. • After milk leaves our farms, it travels by truck to a processor, where people make
cheese, ice cream, butter, yogurt, and other dairy products. • Truckers, packaging manufacturers and food marketers complete
the cycle by transporting and marketing the dairy products everyone loves. This means jobs in the transportation, distribution
and retailer grocer industries.
The effects of a U.S. economic decline will be felt around the world, as trade links the World economy indelibly
to the U.S.
International Herald Tribune 2007

(March 18th, “World Still Needs the U.S. Consumer”, http://www.iht.com/articles/2007/03/18/bloomberg/sxasia.php)
The ability of other countries to emerge from the U.S. economy's long shadow may reflect more wishful thinking than logic.
No doubt, it will eventually happen, especially as some of the bigger emerging countries mature. Right now, the world still
needs the U.S. consumer. The global economy is too dependent on exports to the United States, whose trade deficit was
$765.3 billion in 2006, while Asia and Europe lack sufficient domestic demand to offset reduced U.S. spending on overseas
goods, says Stephen Roach, chief economist at Morgan Stanley in New York. The United States accounts for 24 percent of
Japan's total exports, 84 percent of Canada's, 86 percent of Mexico's and about 40 percent of China's, he says. Just as China is
dependent on the United States, other countries rely on Asia's second-largest economy. So a U.S. slowdown that hurts China
will reverberate in Japan, Taiwan, South Korea and commodity producers such as Russia, Australia, New Zealand, Canada and
Brazil. From 2001 through 2006, the United States and China combined contributed an average of 43 percent to global growth,
measured on the basis of purchasing-power parity, according to Roach. And there may be more fallout from a U.S. decline.
"Allowing for trade linkages, the total effects could be larger than 60 percent," he says. "Globalization makes decoupling from
such a concentrated growth dynamic especially difficult."
5
ADI 08
Fellows
Dairy Aff
Advantage 1 – Economy
The impact is global nuclear war
Bearden, 2000.
[Tom, Ph.D., Nuclear Engineering]
Just prior to the terrible collapse of the World economy, with the crumbling well underway and rising, it is inevitable that some
of the weapons of mass destruction will be used by one or more nations on others. An interesting result then—as all the old
strategic studies used to show—is that everyone will fire everything as fast as possible against their perceived enemies. The
reason is simple: When the mass destruction weapons are unleashed at all, the only chance a nation has to survive is to
desperately try to destroy its perceived enemies before they destroy it. So there will erupt a spasmodic unleashing of the long
range missiles, nuclear arsenals, and biological warfare arsenals of the nations as they feel the economic collapse, poverty,
death, misery, etc. a bit earlier. The ensuing holocaust is certain to immediately draw in the major nations also, and literally a
hell on earth will result.
6
ADI 08
Fellows
Dairy Aff
Advantage 2 – Dairy Cartels

Federal dairy subsidies regulating price enforce a cartel, which inflates milk prices above free-market levels
heralding in socialized control of agriculture
Jacoby 2001
(Jeff - op-ed columnist for the Boston Globe since 1994 - April 25, 2001 “Socialism Does Milk Good?”
http://www.capmag.com/article.asp?ID=498 accessed 7-30-08 [nfb])
Socialism is dead in the former Soviet Union, but if you live in New England, it is alive and well in your grocer's dairy case. The
price you pay for a gallon of milk is not determined by competition and the free market. It is set instead by a cartel called the
Northeast Interstate Dairy Compact, which was created for the explicit purpose of overcharging New England consumers in order
to make rich dairy farmers richer. That is not, of course, how the compact describes itself. It claims to be in the business of keeping local dairy farms
from going under and of ensuring a steady supply of milk. And how does it achieve these admirable goals? By artificially hiking the price of milk
and using the extra money to subsidize dairy farmers. If this strikes you as government price-fixing, corporate welfare, and
hopeless economics, you're not alone. Individuals and organizations across the political spectrum -- from the very liberal Thomas Birmingham,
president of the Massachusetts Senate, to the conservative Beacon Hill Institute, a Suffolk University think tank -- have called for ending this sour
milk-pricing system. It's a call worth heeding. Federal regulators have been setting minimum prices for most of the milk sold in the
United States since the Depression. By means of a bureaucratic device known as marketing orders, dairy companies are effectively
forced to buy milk from local farmers, with payment determined by a convoluted formula based on -- no joke -- how far they
are from Eau Claire, Wis. A Boston creamery might prefer to buy milk from a Midwestern dairy farm, paying less and sharing the
savings with its customers. The law says it may not. The Northeast Dairy Compact takes this bizarre federal scheme and makes it
even worse. While milk prices in other parts of the country can rise and fall with supply and demand, the compact guarantees dairy farmers a high price for
their milk no matter what. Milk processors in New England have been forced to pay about 20 cents per gallon more than processors elsewhere. That surtax
gets passed on to consumers, which is why milk costs more in Boston and Hartford than it does almost anywhere else. Defenders of dairy
socialism laud this highly regressive rip-off, which transfers money from families that have a lot of children to families that have a lot of cows. In
language that sounds like it was adapted from a Khrushchev-era Five-Year Plan, the compact's Web site brazenly declares that "the ability of the
states to regulate milk prices collectively, rather than individually, is in the public interest."
7
ADI 08
Fellows
Dairy Aff
Reject every move toward socialism –collectivism will destroy humanity unless halted by academics and
policy-makers
Sechrest 2008
(Larry J. - professor of economics at Sul Ross State University in Texas, adjuct faculty at the Mises Institute, a research fellow
at The Independent Institute, and the director of the Free Enterprise Institute -3/24/2008 “The Anti-Capitalists: Barbarians at
the Gate” [nfb])
Where, then, do we stand? As we know, socialism is calculational chaos. Rational appraisement and allocation are eternally
elusive. It is a gigantic negative-sum game in which each player quickly grabs a piece of the pie, and all the while the pie
shrinks before the players' eyes. The welfare/warfare state, the interventionist state, is no improvement. Each intervention
begets yet another. Bureaucracy is the only "industry" guaranteed to experience growth. Each new regulation taxes the
private sector, relentlessly shifting resources out of the hands of the productive, and into the hands of the unproductive.
Capitalism is the only positive-sum game in town. To attack capitalism is to attack civilization itself.
In short, the case against capitalism is indefensible. It is smoke and mirrors. It is rooted in envy and malice. It is fueled by a
stunning ignorance of sound economics, which is part and parcel of a broader rejection of reason itself. These anti-
capitalists, these New Barbarians will — if they get their way — finally destroy not only capitalism, but also education,
science, technology, literature, art, individual rights, prosperity, in fact, civilization itself. No, it will not come like an
avalanche of snow, cascading down some mountainside. It will be, it has been, more like a stream of water slowly but
inexorably eroding the surface of a rock until, eventually, the rock simply is no more. One might say that mankind [sic]
is slouching, shuffling toward collectivism. What are we to do? We can and must continue the magnificent legacy of Ludwig
von Mises. We must extend Austrian economics in every way and direction. We must encourage the application of Austro-
libertarian insights to every field and every topic imaginable. We must engage other scholars, policymakers, and the
molders of opinion both in print and in person. We must educate the public whenever the opportunity presents itself.
We know the task is not easy. Let's face the truth. The collectivists have their tentacles firmly inserted into every shadowy
orifice of the body politic. We can — we must — root them out by mercilessly exposing them to the light of reason, liberty, and
the economics of Menger, Böhm-Bawerk, Mises, and Rothbard. In this grand endeavor, we may perhaps take heart from an
observation offered long ago by a great American patriot, Samuel Adams: It does not require a majority to prevail, but
rather an irate, tireless minority keen to set brush fires of freedom in people's minds. Until the day of liberation finally
arrives, let us dedicate ourselves to being that irate and tireless minority.
[gendered language said in context]
8
ADI 08
Fellows
Dairy Aff

Independently, dairy cartels cause habitat loss and species extinction – subsidies undermine our trade credibility
to open foreign markets, causing rainforests to be cleared for pastures
Tierney 1999
(John– Science reporter for the New York Times - March 18, 1999
http://query.nytimes.com/gst/fullpage.html?res=9405EEDF1731F93BA25750C0A96F958260 accessed 7-30-08 [nfb])
IT'S not surprising that dairy farmers would like New Yorkers to pay more for milk, or that politicians want to oblige the
farmers. But why are environmental groups supporting this cause when it may end up harming the environment even more
than consumers? New York farmers want to join the Northeast Interstate Dairy Compact, a New England group that sets milk
prices. Urban politicians and consumer groups have opposed the cartel, arguing that the burden of higher milk prices -- perhaps
15 cents a gallon on average -- would fall most heavily on poor families with children. But the farmers recently prevailed in the
State Legislature, and are now seeking final approval from Congress. The cartel has been championed by Gov. George E.
Pataki and other upstate Republicans, who have set aside their own professed belief in the free market. The cartel is also being
supported by some Democrats, including Senator Charles E. Schumer, and an array of environmental groups like the
Adirondack Council, the National Audubon Society, the Natural Resources Defense Council and the Sierra Club.''Dairy farms
provide cultural and natural landscape preservation,'' said David Miller, the executive director of the New York State office of
the National Audubon Society. ''We want to protect them against suburban sprawl and preserve habitat for birds and other
species.'' It's true that New York has been losing dairyland -- about five million acres since 1960, according to Nelson Bills, an
agricultural economist at Cornell University. But most of the abandoned pastures have reverted to brushland and forest, which
environmentalists can hardly consider less ''natural'' than farmland.
''Environmentalists in the cities don't have very clear thinking on this issue,'' said William Parment, a Democratic
Assemblyman and former dairy farmer from rural Chautauqua County who has opposed the dairy cartel. ''It's difficult to
believe if you're looking around the George Washington Bridge, but the largest change in land use this century in New York
State has been from farm field to forests.'' What about the minority of dairy farms near cities that might be converted to malls
and subdivisions? If the citizens of those communities deem it vital to preserve those farms, they could use general tax
revenues to buy development rights from farmers, especially the small farmers that environmentalists want to keep in business.
That approach seems more equitable and direct than raising milk prices, which essentially forces consumers to pay a regressive
tax that goes mostly to the owners of large farms. AND the higher prices may well mean less farmland, because consumers
would respond by buying less milk. If New Yorkers' milk consumption declined by 1 percent to 2 percent, as economists have
projected, the resulting milk glut would render superfluous perhaps 10,000 acres now used by dairy farmers. In the long run,
the dairy policies advocated by environmentalists could even contribute indirectly to the destruction of tropical forests,
according to Dennis T. Avery, the director of global food issues for the Hudson Institute, a conservative public policy group in
Indianapolis. ''The more that the states and the Federal Government intervene in agriculture,'' Mr. Avery said, ''the more
difficult it becomes for the United States to demand that other countries open their markets to our farm products. That's
bad news for tropical wildlife. If there were free trade, the countries that are now cutting down tropical forests to create
low-quality farmland would instead be buying grain and dairy products from America.'' Environmentalists often disdain
America's factory farms in favor of the agriculture practiced by traditionalists in the Adirondacks and peasants in the tropics,
but those farmers need much more land to grow food. Mr. Avery calculates that the increased efficiency of modern farming
has saved an area of land equal to the combined size of Europe, the United States and South America. 'Old MacDonald's
farm couldn't feed the planet's population without destroying virtually every square mile of wildlife habitat,'' Mr. Avery
said. ''Environmentalists and dairy farmers ought to be increasing trade instead of creating cartels. Rather than raising
the price of milk for children, New York farmers should be exporting the milk so India doesn't dispossess the Bengal tiger.''
9
ADI 08
Fellows
Dairy Aff

Rainforests are hotspots for biodiversity
ScienceDaily 2007
(August 14th, “Rainforest Biodiversity Shows Differing Patterns”,
http://www.sciencedaily.com/releases/2007/08/070808132022.htm, Accessed: 7/31/08)
Rainforests are the world's treasure houses of biodiversity, but all rainforests are not the same. Biodiversity may be more
evenly distributed in some forests than in others and, therefore, may require different management and preservation strategies.
That is one of the conclusions of a large-scale Smithsonian study of a lowland rainforest in New Guinea, published in the Aug.
9 issue of the journal Nature. Most previous research has focused on diversity "hot spots," such as upland rainforests in the
foothills of the Andes, where steep gradients in elevation, temperature, rainfall and other environmental factors boost diversity
by creating diverse habitats within a short distance. Such change in a region's species makeup between sites is called beta
diversity: some rainforests have steep environmental gradients and high beta diversity. A large proportion of the world's
remaining rainforests are lowland forests in New Guinea, Borneo and the Congo and Amazon Basins. Many researchers have
speculated that such lowland rainforests also would have high beta diversity, but this has not been rigorously tested. Little data
exists for species distributions in these vast forests, particularly for insects, which make up a large share of the world's
biodiversity.
Biodiversity loss risks extinction
Diner 1994
(David N. Military Law Review Winter 1994 143 Mil. L. Rev. 161 THE ARMY AND THE ENDANGERED SPECIES ACT:
WHO'S ENDANGERING WHOM? Judge Advocate General's Corps, United States Army)
The main premise of species preservation is that diversity is better than simplicity. 77 As the current mass extinction has
progressed, the world's biological diversity generally has decreased. This trend occurs within ecosystems by reducing the
number of species, and within species by reducing the number of individuals. Both trends carry serious future implications. 78
[*173] Biologically diverse ecosystems are characterized by a large number of specialist species, filling narrow ecological
niches. These ecosystems inherently are more stable than less diverse systems. "The more complex the ecosystem, the more
successfully it can resist a stress. . . . [l]ike a net, in which each knot is connected to others by several strands, such a fabric can
resist collapse better than a simple, unbranched circle of threads -- which if cut anywhere breaks down as a whole." 79 By
causing widespread extinctions, humans have artificially simplified many ecosystems. As biologic simplicity increases, so does
the risk of ecosystem failure. The spreading Sahara Desert in Africa, and the dustbowl conditions of the 1930s in the United
States are relatively mild examples of what might be expected if this trend continues. Theoretically, each new animal or plant
extinction, with all its dimly perceived and intertwined affects, could cause total ecosystem collapse and human extinction.
Each new extinction increases the risk of disaster. Like a mechanic removing, one by one, the rivets from an aircraft's wings, 80
mankind may be edging closer to the abyss.
10
ADI 08
Fellows
Dairy Aff
Advantage 3 – Trade Leadership
US Trade leadership low- lack of cooperation in DOHA rounds, massive subsidies
Business Standard 2008

(“WTO Director General says DOHA Round Not Dead” http://www.business-
standard.com/india/storypage.php?tp=on&autono=43534 July 30th 2008)
The new ceilings, under which the United States doesn't actually have to cut a cents of its current farm subsidies, leave
the country big room to raise its farm subsidies in the future instead. That well explains why Indian Commerce and
Industries Minister Kamal Nath has accused the United States during the negotiations of giving no concern for the lives of
the people in developing nations and hampering the process of negotiations for its own interests. Several delegates
Tuesday hoped to make further efforts to salvage the negotiating process in light of what had been achieved in trade talks so
far. However, the momentum has ground to a halt for the moment. "We will need to let the dust settle a bit, it's probably
difficult to look too far into the future at this point," WTO chief Pascal Lamy said, "WTO members will need to have a sober
look at if and how they bring the pieces back together."
The Milk Price Support Program is the biggest barrier to a US-led international trade agreement
Christiansen 2007
(Suzanne, March, Dairy Industries International, Vol. 72, Iss. 3; pg. 23, 2 pgs “America adds value”, ProQuest document ID:
1297170361, Accessed: 7/30/08)
That being said, Tipton cites the need for more international consensus on global dairy trade. "Right now, our export
opportunities look bright, but it would certainly be a boon to get a more global trade agreement. We've done well with
numerous bi-lateral and multi-lateral agreements, but the real win would be to get a new WTO agreement in place." However,
there is a fly in the ointment of international trade - domestic price supports. The Milk Price Support Program, which is being
kept on by the Bush administration's most recent farm bill proposal, is said to make up around 30 per cent of the most
tradedistorting subsidies. Both the IDFA, as well as European agricultural commissioner Mariann Fischer Boel, have spoken
against it. Tipton explains: "We think it's time to provide producers with a safety net that works instead of continuing the
ineffective programmes we have - the dairy price support programme, that stands ready to buy any surplus commodities, and
the Milk Income Loss Contract (MILC) programme - which makes payments under a scheme that makes little sense. Things
like revenue insurance and payments that can help farm sustainability are proposed for other commodities and we think that
could work much better for dairy than what we currently have." That being said, the administration has actually sought to
significantly reduce the MILC programme payouts, causing some in Congress to look into new methods for protecting dairy.
For example. Representative Leonard Boswell (D-IA), the chairman of the Livestock, Dairy and Poultry Subcommittee,
recently called for the US Department of Agriculture (USDA) to consider revenue insurance for dairy farmers, saying it is the
"right direction for dairy." In response, Secretary of Agriculture Mikejohanns has testified in a House subcommittee that USDA
is considering a new revenue insurance program for dairy producers. The IDFA is supporting this type of insurance for dairy.
11
ADI 08
Fellows
Dairy Aff
US must make a good faith effort to lower subsidies to regain trade leadership
Hagstrom, 2008
Jerry, “US offers to lower farm subsidies Limit” Agweek Magazine . July 29th 2008.
Jul. 29--WASHINGTON -- U.S. trade distorting farm subsidies would be limited to $15 billion per year rather than $48
billion per year under an offer U.S. Trade Representative Susan Schwab made July 22 at the Doha round of trade talks
in Geneva, but it was unclear whether the offer would be enough to move the round forward. Trade negotiators made
little progress during a week of meetings, but on July 25, a World Trade Organization spokesman said there were signs of
progress. At a July 22 news conference, Schwab said that in exchange, the United States wants "ambitious" offers in
reductions to tariffs and other trade barriers to U.S. agricultural and manufactured goods and a clause that the United
States would not be sued to reduce the farm subsidies even more. "This is a major move, taken in good faith with an
expectation that others will reciprocate and step forward with improved offers in market access," Schwab said. "These
cuts will deliver effective and significant reductions in trade distorting domestic support. They would require
adjustments to our farm programs."
The milk price support program is over ¼ of US Amber box payments, repealing those subsidies key to meet
WTO burden
Hilker 2008
(Jim. Department of Agriculture, Food and Resource Economics “2008 Annual Agriculture Outlook” January 2008)
Especially pertinent to dairy are domestic support programs. Agreements made under the current WTO agreement (Uruguay
Round) limited “amber box” programs — farm price and income support programs deemed to be trade distorting. These
include price support programs even though no treasury payments are actually made — the WTO position is that price support
programs represent a transfer from consumers to producers whether or not the support prices are binding. The U.S. must
adhere to a declining Aggregate Measure of Support (AMS), calculated as the total of amber box program benefits. The
current maximum AMS permitted the U.S. is $19.1 billion. In 2001, the last year in which reporting was made, the U.S.
reported an AMS of $14.4 billion, $4.7 billion under the cap. The dairy price support program contributes about $4.5 billion to
the annual U.S. Aggregate Measure of Support. This represents 25 percent of the AMS cap and 75 percent of that portion of
the AMS associated with price support programs. The dairy price support program benefits are calculated by multiplying total
U.S. milk production by the difference between the farm milk price support level of $9.90 per hundredweight and a base period
world market reference price for milk used for manufacturing.
12
ADI 08
Fellows
Dairy Aff
US Leadership reorienting trade policy key to avoid extended failure of DOHA and a world wide wave of
protectionism
China View, 2008

“News Analysis: DOHA Failure and beyond” July 30 2008
The failure of the Doha Round could lead to a series of serious consequences as it adds to world economic uncertainties.
"This is a very painful failure and a real setback for the global economy when we really needed some good news," said Peter
Mandelson, the European Union's trade commissioner, following the breakup of ministerial negotiations. Tuesday's failure
could mean that WTO members would not have enough time to conclude the trade talks within this year. It could even be put
aside for several years due to elections and government changes in the United States, India and Brazil, analysts say. They
believed that, under such circumstances, trade protectionism may rear its head again worldwide, which would spark new
bilateral or multilateral trade disputes. What is even worse is that it may add more uncertainties to the world economy which
is slowing down amid a global financial turmoil and rising inflation worldwide.
Global protectionism leads to nuclear war
Spicer 96
(Michael, Member of British Parliament, The Challenge From the East and the Rebirth of the West pg 121)
The choice facing the West today is much the same as that which faced the Soviet bloc after World War II: between meeting
head-on the challenge of world trade with the adjustments and the benefits that it will bring, or of attempting to shut out
markets that are growing and where a dynamic new pace is being set for innovative production. The problem about the second
approach is not simply that it won't hold: satellite technology alone will ensure that consumers will begin to demand those
goods that the East is able to provide most cheaply. More fundamentally, it will guarantee the emergence of a fragmented world
in which natural fears will be fanned and inflamed. A world divided into rigid trade blocs will be a deeply troubled and
unstable place in which suspicion and ultimately envy will possibly erupt into a major war
13
ADI 08
Fellows
Dairy Aff
Advantage 4 - Veal
The government feeds surplus powdered milk purchased through the MPSP back to the same cows it came from
– this nonsensical cycle of production and consumption encourages dairy farmers to raise half of all calves for
veal
Cohen 2003
(Robert - author of "Milk: The Deadly Poison" and "Milk: From A to Z." He operates the site NotMilk.com as well as a
Yahoogroups free email list, where he sends out a daily column - April 15, 2003 “Feeding Cows Surplus Milk is Udder
Insanity” http://naturalsolutionsradio.com/articles/article.html?id=5549&filter= accessed 7-30-08 [nfb])
It's been a long winter. The drought will continue, and it should be a longer and more disastrous summer for farmers,
particularly dairy farmers. They are all losing money. Fuel costs have increased. Feed costs are rising. Milk prices continue to
decrease, so they overproduce, flooding the market with a product nobody wants or needs. Their downward spiral
continues to accelerate. This week (April 8, 2003), the United States Department of Agriculture (USDA) announced that they
would send hundreds of millions of pounds of subsidized milk powder, which they had previously purchased from dairy
farmers, back to those same dairymen to feed their cows. Well, at least they've found some use for unwanted dehydrated milk
powder that nobody else wants, but at whose expense? Does this new program make any sense?
Farmers will receive enough non-fat powder to feed each cow two pounds of milk each day for the next month. USDA has over
1 billion pounds of nonfat dry milk in storage. Eleven pounds of whole milk are required to produce one pound of dry milk
powder. If cows are fed two pounds of milk powder, which USDA purchased from these same cows, then each cow will be
expected to produce 22 pounds of new milk. Of course, it took 22 pounds of milk to manufacture those two pounds of milk
powder. Since there is a surplus, that new milk will most likely be converted into new dried milk powder.
The new milk powder will be stored for a year, then shipped back to these same farms to feed these same cows to produce
more milk to be converted into more milk powder. The cows will have calves. Half of the calves will be males. They will be
killed or sold for veal. The other half will be raised to become dairy cows. They will be milked. They will produce more
surplus milk to be converted into, yeah, you've got it.
We have an ethical obligation to reject veal farming
Farm Sanctuary 2002

(November 18th, the nation's leading farm animal protection organization,
http://www.farmsanctuary.org/mediacenter/past/pr_njcelebs_02.html)
To produce veal, young calves are chained by the neck in two-foot-wide crates, and this is where they spend their entire lives,
unable to walk, turn around, or even lie down comfortably. The calves are fed an all liquid diet that is deficient in iron and fiber
in order to induce anemia and the pale-colored meat sold as veal. S. 1478 requires that veal calves be given enough space to
turn around, and it requires that they be provided with adequate nutrition.. Mary Tyler Moore wrote, "As a civilized nation, we
have an ethical obligation to treat animals humanely. Enacting S. 1478 will help us fulfill that obligation, and it will bring
animal protection laws and husbandry practices more into line with popular sentiments." The humane treatment of farm
animals is a growing social concern, and polls conducted earlier this year show widespread opposition to veal production
methods in New Jersey. In April, a Zogby poll found that eighty-five (85%) percent of New Jersey citizens consider it
unacceptable to tether calves in crates, and in May, the Eagleton Institute at Rutgers University found nearly a 5 to 1 margin of
support (72% support to 15% oppose) for S. 1478 among New Jersey citizens. To date, thirty five New Jersey restaurants have
signed pledges not to serve veal from calves raised in crates and fed a deficient diet.
14
ADI 08
Fellows
Dairy Aff
Advantage 5 – Nutrition Programs

High milk prices because of federal pricing subsidies decrease participation in nutrition programs for women
and children
USDA 2004
(July, The study was coordinated by Don Blayney and Mary Anne Normile of USDA’s Economic Research Service, Report to
Congress, “Economic Effects of US Dairy Policy and Alternative Approaches to Milk Prices”, dairyreport1.pdf)
Dairy programs raise the retail price of fluid milk and lower the prices of manufactured products such as butter and cheese.
This affects both consumer expenditures on food and the cost of operating food and nutrition programs. The Special
Supplemental Nutrition Program for Women, Infants, and Children (WIC) is a discretionary grant program funded by annual
appropriations. The number of participants depends on the appropriation and the cost of operating the program. To the extent
that dairy programs increase the retail price of fluid milk and other dairy products—products that make up a large share of the
WIC food package—they have the potential to reduce program participation. Other food and nutrition programs are entitlement
programs, and their costs are indexed to price indices that increase Government outlays when dairy programs raise product
prices. Higher prices are therefore unlikely to affect participation. However, higher dairy prices can affect how Food Stamp
recipients choose to spend their food dollars.
These nutrition programs are essential to feed our nations poor families because of high food prices
Chourey 2008
Sarita, Tribune Business News, July 23 “South Carolina's poor mothers seek more food aid”
State officials say rising population in certain parts of the state is partly the cause of the increase in WIC services. But they also
point to high gas prices and the ripple effect those have on all commodities, especially food. "People with fewer resources are
going to be hit the hardest," said DeAnna Messias, associate professor of women's and gender studies and nursing at the University
of South Carolina. "The cost of food has gone up. The cost of transportation and housing, things like that," she said. "In any time
like this it's not surprising that those with fewer material resources would be looking for more services." The federal government
estimates state demand and allocates funding for WIC, which stands for Special Supplemental Nutrition Program for Women,
Infants and Children. Pregnant women or those who have just given birth may take advantage of supplemental food vouchers,
nutrition education and referrals to health and other social services, provided they meet income eligibility standards. A woman who
participates in the federal Food Stamp Program, Medicaid or Temporary Assistance for Needy Families typically qualifies. "Our
population is also growing," said Nick Davidson, spokesman for the S.C. Department of Health and Environmental Control region
covering Beaufort, Colleton, Hampton and Jasper counties. He said the population growth is not as fast as the increase in WIC
services. "We have also put a lot of emphasis on WIC lately, too, because we try to meet certain goals at the federal government
program," he said. But other state services are not overshadowed by the supplemental food program, Davidson said. "Anything that
is going up in demand for service inevitably receives attention," he added. "So our increased numbers tend to result in attention,
but not because we've targeted our WIC program for attention above others." Messias said the summer months are typically the
most difficult for poor mothers struggling to feed themselves and their children. With school out until fall, older children who
received free or reduced lunches at school through the federal program must rely on other sources of food. That forces women to
stretch already-scarce resources to include school-aged children. WIC covers children up to 5 years old and women.
15
ADI 08
Fellows
Dairy Aff
Advantage 5 – Nutrition Programs
We have a moral obligation to feed the poor by supporting nutrition programs
Dix 2007
(Tara K., ormer associate editor at U.S. CATHOLIC, is a freelance writer in Chicago, U.S. Catholic 72.10 October, p12(6),
“Recipe for a hungry planet: feeling helpless about starving children in Asia or even next door? If you're looking for ways to
put food on your neighbor's tables, these five practical suggestions are a ...(Viewpoint essay)”)
Facts are facts: There is enough food in the world to feed the world. So why do 1 billion still go hungry? Why do 30,000 the every day
of starvation? And why does the number of hungry people rise at a rate of 5 million per year? Catholic Relief Services' food aid
expert William Lynch says it is quite simply a lack of desire. "Of course there is enough food to give to those who need it," he says.
"But is there the will? Absolutely not." Most agree the eradication of hunger and poverty depends on a combination of person-to-
person compassion in the form of organized aid as well as an overhaul of societal and civic structures that prevent equitable access to
food. The task seems Herculean, and the average Joe is easily discouraged. Still, one would be hard-pressed to find a person of faith
who doesn't see feeding the hungry as part of a Christian's duty. "The theme of meals and eating permeates the gospels," says Mark
Brinkmoeller, director of church relations for Bread for the World, an anti-hunger organization. "In the Gospel of Matthew, Jesus says,
'Whom have you fed?' And we will be judged on this. This is intrinsic to our faith." Sen. George McGovern, former ambassador to the
United Nations' food agency and coauthor of Ending Hunger Now (Augsburg Fortress), puts it in blunt terms: "If we fail to do this, we
will stand condemned before the bar of history. In that case, shame on you, and shame on me." The biggest problem facing the hungry
is the poverty trap: the cyclical combination of no money, no food, and no health care. Malnutrition leads to illness; illness drains
financial resources; drained finances lead to malnutrition. Factor in a lack of access to education, financial services, or credit--all of
which prevent upward economic mobility--and you've got a person who is--in a word--trapped. On the international scene, we see
photographs of emaciated victims of famine caused by drought, civil war, or natural disaster. We see children with distended bellies
and vacant eyes, collarbones and shoulder blades protruding. These are the extreme, but all too frequent, cases. About 8 percent of
child deaths from starvation are a result of emergency food shortage. In our own country we may not see hunger the way we can in
the midst of international crises, but it's there: in students who can't concentrate because their stomachs are empty, in elderly people
who skip meals, and in parents who forego their own needs so that their kids can eat.
16
ADI 08
Fellows
Dairy Aff
T – MPSP is nearly all
The Milk Price Support Program is a large part of total US amber box subsidies
Balagtas 2007
(Joseph V., Assistant Professor, Department of Agricultural Economics, Purdue University, American Enterprise Institute project,
Agricultural Policy for the 2007 Farm Bill and Beyond, “U.S. Dairy Policy: Analysis and Options”, 20070515_balagtasfinal-1.pdf,
Accessed: 7/30/08)
The MPSP is also a significant contributor to the U.S. aggregate measure of support (AMS) as calculated under World Trade
Organization (WTO) guidelines. Under the WTO’s Agreement on Agriculture, the United States is committed to limit tradedistorting
domestic programs to $19.1 billion per year. The MPSP is judged by the WTO to be an Amber Box program, and thus counts against
this limit (see Josling 2007).4 Under WTO guidelines, the contribution of the MPSP to the AMS is calculated as the difference
between the support price for milk, currently $9.90/cwt, and a reference world price of milk, currently $7.25/cwt, times total milk
production, regardless of actual government outlays for the program. One rationalization for this calculation is that the MPSP, when
combined with restrictions on imported dairy products, provides greater support for the dairy sector than indicated by MPSP outlays
alone. From 1995 to 2001, the MPSP contributed an average of $4.5 billion per year to the AMS: approximately one-quarter of the
AMS limit, and more than one-quarter of actual Amber Box payments in recent years.
T – MPSP is a subsidy
The Milk Price Support Program is a domestic subsidy
Christiansen 2007
(Suzanne, March, Dairy Industries International, Vol. 72, Iss. 3; pg. 23, 2 pgs “America adds value”, ProQuest document ID:
1297170361, Accessed: 7/30/08)
That being said, Tipton cites the need for more international consensus on global dairy trade. "Right now, our export
opportunities look bright, but it would certainly be a boon to get a more global trade agreement. We've done well with
numerous bi-lateral and multi-lateral agreements, but the real win would be to get a new WTO agreement in place." However,
there is a fly in the ointment of international trade - domestic price supports. The Milk Price Support Program, which is being
kept on by the Bush administration's most recent farm bill proposal, is said to make up around 30 per cent of the most
tradedistorting subsidies. Both the IDFA, as well as European agricultural commissioner Mariann Fischer Boel, have spoken
against it.
17
ADI 08
Fellows
Dairy Aff
MPSP = more subsidies

The Milk Price Support Program is the reason for most other dairy subsidies
Balagtas 2007
Accessed: 7/30/08)
Moreover, the MPSP encourages the production of supported commodities at the cost of innovation. In particular, U.S. dairy
processors have lagged exporters such as Australia and New Zealand in the development of specialized, high-value dairy ingredients,
including a range of concentrated milk protein products. U.S. imports of milk protein concentrate (MPC) grew rapidly through the late
1990s. While data on MPC utilization are scarce, anecdotal evidence indicates that it is used as a protein source in nutrition products,
but also as a substitute for NFDM in the manufacture of cheese and other foods. The potential for MPC to substitute with domestically
produced NFDM has lead to efforts to restrict imports of MPC and to ban its use in cheese and other dairy food products under the
guise that it is not a dairy ingredient approved by the U.S. Food and Drug Administration (FDA). In this way, once again, the MPSP
creates demand for further government intervention in dairy markets.
High milk prices = high food prices

Impacts to inflated prices due to Milk Price Support Program
Jesse 2005
Ed, Professor and Extension Dairy Marketing Specialist, Department of Agriculture and Applied Economics at Univeristy of
Wisconsin. “Marketing and Policy Briefing Paper. Dairy Policy in the Next Farm Bill: An early assessment”. March 2005.
There is also growing recognition that artificially enhanced fluid milk prices have a negative effect on markets for
manufactured products. Without a compensating reduction in milk production, falling fluid milk sales increases the supply
of milk used for manufacturing and decreases the prices of manufactured dairy products. This is an especially
important problem in cheese. The demand for cheese is becoming more inelastic as an increasing proportion of total cheese
is used as a food ingredient or in away-from-home food outlets where there is limited ability to substitute. Consequently, the
negative effect on cheese prices of an expanded supply of cheese milk caused by reduced fluid milk sales is becoming
more pronounced.
AT: Milk Prices Low Now

Supply Shifts don't solve milk prices- timeframe
Hilker 2008
Jim. Department of Agriculture, Food and Resource Economics “2008 Annual Agriculture Outlook” January 2008.
In past years, we looked for a milk-to-feed price ratio of about 3.0. With the very high milk prices of 2007, that price ratio led to an
income over feed cost of about $14.00 per cwt. In other words, there was money to be made last year, even with relatively
expensive feed. U.S. and world stocks of corn, soybeans, and wheat remain very tight, and prices for the next year are high. With
milk prices dropping off, the income over feed costs will decline and producers that are purchasing feed grains will be
squeezed. When the squeeze hurts enough, some herds will exit and milk supply with shift back leading to a higher milk
price. However, this supply shift can take quite a while to happen
18
ADI 08
Fellows
Dairy Aff
MPSP hurts dairy industry
The MPSP is bad for the domestic dairy industry
Balagtas 2007
(Joseph V., Assistant Professor, Department of Agricultural Economics, Purdue University, American Enterprise Institute
project, Agricultural Policy for the 2007 Farm Bill and Beyond, “U.S. Dairy Policy: Analysis and Options”,
20070515_balagtasfinal-1.pdf, Accessed: 7/30/08)
The inefficiencies of each of the main domestic policies for dairy can be summarized as follows: MPSP. • The benefits of
higher prices for supported dairy products may accrue not only to dairy farms, or even mainly to them, but also flow to
processors of those products, as well as suppliers of other inputs. • Government purchases distort dairy product markets,
reducing consumption and increasing production of butter, NFDM, and cheese, and hindering the competitiveness of the U.S.
dairy sector by stifling innovation. • The MPSP increases demand, from taxpayers and from the dairy sector, for additional
policies to limit MPSP costs. • The MPSP hinders progress in multilateral trade negotiations.
Dairy Support Program distorts the market and kills domestic development of dairy
Jesse 2005
Ed, Professor and Extension Dairy Marketing Specialist, Department of Agriculture and Applied Economics at Univeristy of
Wisconsin. “Marketing and Policy Briefing Paper. Dairy Policy in the Next Farm Bill: An early assessment”. March 2005.
Like the non-recourse loan program, the dairy price support program distorts market prices and interferes with exports.
The prime example is nonfat dry milk. Until recently (when world markets for milk proteins tightened considerably), the
CCC purchase price for nonfat dry milk was well above world market prices. In fact, competitors for nonfat dry milk
exports used the CCC price as an upper bound reference price. The CCC purchased vast quantities of nonfat dry milk,
even during times when the farm price was well above the support price. High CCC purchase prices for nonfat dry milk
also impeded the development of domestic production capability for milk protein concentrate and other forms of milk
proteins.
If a multilateral trade pact is approved prior to the 2008 farm bill debate, the dairy price support program may not be
an option. In any agreement, the U.S. will surely be obligated to systematically reduce domestic support to its farmers
over time. Unless the procedure used to calculate the “cost” of price support programs is altered, then dairy price supports
could prove to be too large a contributor to the permitted level of support, if not immediately, then down the road.
19
ADI 08
Fellows
Dairy Aff
MPSP hurts dairy industry

The Milk Price Support Program prevents increased exports
Bailey 2007
(Ken, associate professor of dairy markets and policy at The Pennsylvania State University, Feedstuffs, February 12th, “Ideas
suggested for farm bill dairy title.(Dairy Industry INSIDER).”)
Wolff's dairy policy roundtable discussion group came up with the following themes: * Strengthen the safety net for producers.
The MILC program has been an important safety net for a large number of milk producers. DPSP provides very low support
price protection for dairy producers. In fact, DPSP may be hindering the ability to export dairy products. Consideration should
be given to eliminating DPSP and restructuring the MILC program into a new Milk Target Price Program. Such a program
would make payments to all producers whenever the Class III price (or manufacturing price) falls below a target level. The
program could be modified by limiting the payments on milk production or total dollars spent or adjusting the target price
whenever feed costs rise above a threshold level. * Develop export markets. The U.S. is in a good position to become a
significant player in the global dairy markets. The U.S. is already a large exporter of whey and lactose, products not regulated
under DPSP. Having access to strong markets for dairy products will allow the U.S. to continue to grow beyond domestic
markets. However, the U.S. could benefit from positive changes. First, DPSP is a hindrance to producing products for export
markets and should be eliminated or adjusted to be more flexible so as not to inhibit the manufacture of nonfat dry milk for
export customers and to provide incentives for new export product development and associated manufacturing capacity. This
change, in combination with improvements in the federal milk order system, would provide processors with more accurate
price signals to make economically rational production decisions. Instead, processors must currently reconcile their input costs
under federal milk orders, and DPSP encourages the production of nonfat dry milk rather than other milk proteins for domestic
and export markets. The U.S. should commit to global trade, retool production capacity, develop reliable customers and meet
their needs.
20
ADI 08
Fellows
Dairy Aff
Dairy subsidies hurt the economy
US Dairy subsidies hurt the US economy
Balagtas 2007
Accessed: 7/30/08)
Public policy plays a larger role in U.S. dairy markets than in any other agricultural market. Central elements of current dairy policy
date back to the New Deal farm legislation of the 1930s. Although the original programs have evolved, they remain largely unchanged
in their main economic implications, even as new programs have been added over time. Meanwhile, the underlying U.S. dairy
economy has gone through sweeping transformations. U.S. dairy farms have become more specialized and productive, as
technological advances have facilitated increased milk production per cow, rapid expansion of dairy farming in the West, and lower
costs of transporting milk. The number of farms has declined, while remaining farms have gotten larger. Individual dairy cooperatives
have grown and merged, so that the largest of them now account for significant shares of national milk production. Consumption
patterns have also changed. The largest share of milk no longer goes to fluid consumption but to manufactured dairy products, which
are increasingly traded in global markets. In short, today’s dairy sector bares little resemblance to that of the 1930s, or even to that of
the 1960s. Yet dairy policies designed for that earlier era are still in effect today. This paper describes the economic effects of the
main elements of current U.S. dairy policy, presenting data and drawing from the conceptual and empirical literature on the subject
where possible. Four main policy instruments are examined: the Milk Price Support Program, federal and state milk marketing orders,
trade policy affecting U.S. dairy markets, and the Milk Income Loss Contract program. For each policy instrument, the effects on
dairy sector prices and quantities are discussed, along with the implications for economic welfare of producers, processors, and
consumers. A unifying theme that emerges across the various policy instruments is that they each effectively transfer income away
from a clearly identifiable group—consumers, taxpayers, and, in some cases, subgroups of dairy farmers—in order to benefit favored
dairy farmers. Moreover, the conceptual analysis of dairy policy, as well as available empirical work, suggests that U.S. dairy policy
fails the cost-benefit test. That is, the costs exceed the benefits, creating a net loss for the U.S. economy. Moreover, regional and farm
size biases inherent in specific dairy policy instruments are unjustified.
Eliminating Dairy subsidies would benefit the dairy industry and the economy as a whole
Balagtas 2007
Accessed: 7/30/08)
A reasonable approach to fixing these shortcomings would be to eliminate the current programs. Elimination of the status quo
programs would yield savings for consumers and taxpayers, and would make some farms better off (those in the upper Midwest and
the West, as well as larger farms in all regions). Deregulation would contribute to a healthier U.S. dairy sector that would be more
competitive in export markets, and improve the outlook for many dairy farms—particularly the more efficient farms—that are harmed
by the current policy regime. Deregulation would have the added benefit of reducing a significant source of international trade
tension. One dairy program alone—the Milk Price Support Program— has contributed one-quarter of the aggregate measure of
support (AMS) limit, and more than one-quarter of actual Amber Box payments, in recent years (for more on these trade programs,
see Josling 2007).
21
ADI 08
Fellows
Dairy Aff
AT: Subsidies key to dairy industry

Removing subsidies will not hurt the dairy industry
Spedding 2008
(Alan– of RuSource: the rural information network, an Arthur Rank Centre project supported by donations and
sponsorship - 15 January 2008 Briefing 588 “Dairy farming without subsidies”
http://www.arthurrankcentre.org.uk/projects/rusource_briefings/rus08/588.pdf. Accessed 7-30-08 [nfb])
David Christensen is confident that he could farm successfully without subsidies by focussing on his core business rather
than diversifying, keeping business investment up and debt down, being part of his milk co-operative to minimise the
volatility of milk prices and working hard on people skills and biodiversity. This briefing is based on a paper given by an
Oxfordshire farmer, David Christensen at the 2008 Oxford Farming conference. Like all case studies it doesn’t provide ‘one-
size-fits-all’ prescriptions, but summarises ideas and attributes which might be applied or adapted in other contexts. It is
collected with other papers from the conference at
http://www.ofc.org.uk/index.php?option=com_content&task=view&id=16&Itemid=30 Where are we now? Can we operate our
dairy farming business without subsidies? The business made a profit for the last financial year and still would have done
had the income from the Single Payment been removed – however it would have been too small to cover much reinvestment.
For the last 6 months of the current financial year we have been receiving 7ppl more than we were getting last year. Our input
costs have risen but by careful forward buying of animal feed we are on target to make a much better profit this year,
discounting the Single Farm Payment, enough to draw some living expenses and also to reinvest. I believe that we are likely to
experience higher milk prices for the foreseeable future but that the medium to longer term is much more difficult to call. Feed
prices are likely to remain high given the tightness of world stocks and the increase in biofuel production. Inflation will keep
on raising all our other costs and so improving efficiency and/or expansion will be needed to maintain profitability. Helping
ourselves 1. Adding value Whilst milk prices are up it is tempting to switch to short term supply contracts at very high milk
prices. But this risks a sudden drop in price which is not impossible. The strategy that we have adopted at Kingston Hill to
minimise this risk and guarantee a sensible and sustainable long term milk price is to try to capture some added value by
moving further up the supply chain. We could do this by adding value ourselves on farm. However this would require a
huge amount of time and can entail a large element of risk. Our membership of the co-operative, Milk Link is enabling us to
add value off-farm. Milk Link was established in 2000 and today has a turnover in excess of £500 million. Getting Milk Link
up and running has been a long hard slog in the face of competition from highly successful and established dairy companies.
The low milk price has acted as a brake too because it has been harder to pay a proportion of milk income back into Milk Link
to fund its start-up. Looked at on a short term basis the cost has been high. As a fledgling organisation the price Milk Link
could pay us for our milk was never going to match the existing milk buyers - on average this has meant that we have received
around 1ppl less than we could have done. I calculate that this has cost us around £280,000. We have also had to pay a
proportion of our milk income back to Milk Link to fund its development and in our case that total figure is currently around
£160,000. However this is still our money and is an investment with an annual return and as Milk Link grows the value of our
share should rise. 2. Sourcing farm inputs Efficient use of inputs is down to means a manager turning sound technical
advice into practice. Our technical advice comes from consultants and commercial companies and industry bodies such as the
Milk Development Council and the Maize Growers Association but also I am a member of two farmer groups, at a local level
the White Horse Dairy Discussion Group and at a UK level the 10-0-1 Group run by John Allen of Kite Consulting. Both
groups offer me the opportunity to attend regular farm visits both in the UK and overseas and to both benchmark and learn
from how my colleagues are running their businesses. With the White Horse Dairy Discussion Group email is a valuable
communication tool and I have recently posted such questions as to where find a good foot trimmer for our herd to advice on
the best bulk storage tank for milk.
22
ADI 08
Fellows
Dairy Aff
Dairy key to NY economy
The dairy industry is the backbone of the New York economy, which is declining now
Kolb 2008
(June 13, Brian M., Assemblyman R-Canandaigua, US Fed News Service, Including US State News, ProQuest document ID:
1502322241, Accessed: 7/30/08)
Living in Upstate New York, I'm sure that many of us know a dairy farmer or even have one in the family. With agriculture as
our state's top industry, and its largest sector being comprised of dairy farming, it is inconceivable to think what Upstate New
York would be like without our dairy farmers. Milk is New York's leading agricultural product and has been for many years. In
fact, milk has been the official state beverage for over 25 years. Milk sales account for one-half of total agriculture receipts in
the state. According to the New York State Department of Agriculture and Markets, production in 2005 was 11.7 billion pounds
with a value of $1.91 billion, making New York the nation's third leading producer. We all know that dairy farmers are some of
the hardest working people in our state, but the last few years have been very difficult for them. In 2006 alone, an estimated
460 dairy farms were forced to shut down. To ease some of the pain, last year the Legislature passed the Dairy Assistance
Program, which called for $30 million in a one-time direct payment to offset the low price of milk being paid to our dairy
farmers. Now, with milk prices on the rise, our farmers are being forced to face new challenges in the form of our struggling
economy. That is why I am co-sponsoring legislation that would establish a dairy farmers' bill of rights that prohibits practices
to intentionally impair a producer's collective bargaining ability and prevent dealers from thwarting a producer's ability to join
in an association of producers or cooperative. Representing a majority of the farmers in Upstate New York, my Assembly
Minority Conference and I will continue to be a voice for dairy farmers, as well as the entire agricultural industry, as we work
to ensure that it remains the backbone of our economy. During June we observe New York State dairy month, bringing
attention to the significant impact this industry has on our economy. That is why, for more than a decade, my Assembly
colleagues and I have celebrated dairy farming by hosting Dairy Day in Albany. This year, June 18 will be the day that
hundreds of people converge on the Legislative Office Building to help us highlight the importance of our state's dairy farmers
and others in the dairy industry. As always, vendors from all over Upstate New York are scheduled to participate, and showcase
their fresh products at our event. Past participants include The American Dairy Association, Brown Cow Ice Cream, Byrne
Dairy, Friendship Dairies, Garelick Farms, Heluva Good, H.P. Hood, McCadam Cheese, New York State Dairy Foods, Pride of
New York, Ronnybrook Farms Dairy, Stewart's Shops and Upstate Farms.
23
ADI 08
Fellows
Dairy Aff
Dairy Key to the Economy
The dairy industry is key to the US economy
Answers 2008
(Corporation July 29, 2008 “US Industry Profile: Dairy farms” http://www.answers.com/topic/dairy-farms-sic-0241
accessed 7-30-08 [nfb] (SIC 0241)
Dairy farming is one of the leading agricultural activities in the United States, with dairy cash receipts totaling $20.5
billion in 2002. Because of scientific advances increasing milk production, the total number of dairy cows in the United States has been declining steadily
since 1970, whereas the total output per cow has increased significantly. The overall number of dairy farms was 97,560 in 2001, down from 123,700 in 1997.
Despite the 21 percent decline in milk cow operations, milk production increased 6 percent, from 156,001 million pounds
in 1997 to 165,336 million pounds in 2001. The dairy farm industry has been undergoing some significant changes during
the early twenty-first century, caused by changing government regulations regarding milk subsidies and environmental
management, geographical shifts in dairy farm populations, increased herd size, and increased milk production per cow. Despite setbacks during the 1990s
caused by foot-and-mouth disease and mad cow disease that shook the entire cattle industry, milk products have become an increasing part of the American
diet. In 2000 dairy products accounted for 9.08 percent of food dollars, up from 6.65 percent in 1995. ORGANIZATION AND STRUCTURE Number and
Size of Farms. Every state in the country has dairy farms; however, warmer climates are not generally suited to efficient year-round milk
production. Basically, about 88 percent of milk produced in the United States is produced in the 22 states considered to be the nation's Dairy Belt. The Dairy
Belt is in the northern region, extending from New York to Minnesota, though California is the largest milk-producing state in the country. Wisconsin, a Dairy
Belt state, is the second largest dairy-producing state. Wisconsin led in dairy production for many years, earning the state the title "The Dairy State," but
California surpassed it in total dairy production in 1994 and has held the lead ever since. For 1997 and 1998, California produced 7.1 billion pounds of milk
during the April-June quarter (the season of highest milk production), while Wisconsin produced 5.8 billion. Other leading dairy states are New York,
Pennsylvania, and Minnesota.
24
ADI 08
Fellows
Dairy Aff
Dairy not key to the economy
US dairy policy has a negligible effect on food prices

USDA 2004
Seventy years of Federal intervention in dairy markets makes it difficult to quantify the full impacts of national dairy policy,
since it is not possible to know how today’s industry would look in the absence of dairy programs. However, economic models
simulating the effects of removing current dairy programs provide broad insights into dairy policy’s implications for milk
producers, consumers, and the rural economy. An examination of dairy program impacts suggests that Federal dairy programs
raise the all-milk price by only about 1 percent, and raise total producer revenues (returns plus government payments) by 3
percent, on average, over 5 years. Shortrun effects of policy can be significantly larger. Estimated effects of government
programs would also be greater in years of low prices. While producers are, as a whole, better off with dairy programs, these
programs do raise consumer costs (modestly) and increase government expenditures. Dairy programs can have countervailing
effects. For example, the Milk Income Loss Contract (MILC) program, by increasing producer returns through production-
linked payments, expands production and thereby reduces the milk price. Without the MILC program, the remaining dairy
programs raise the all-milk price by 4 percent (compared to about 1 percent with MILC), on average, over 5 years. Because
they have modest effects on prices and returns, Federal dairy programs have a limited impact on profitability and viability of
dairy farms, increasing the share of farms that cover all costs by 5 percent in the short run (fig. 1.4). By increasing farm-level
returns, these programs may enable high-cost farms to remain in business longer, but only in the short to medium term. In the
longer run, high-cost farms will have difficulty competing with low-cost dairy producers. Higher prices improve the
profitability of low-cost dairy producers, which may enable them to expand production and gain market share.
Federal dairy programs do not affect the economy

USDA 2004
National dairy programs have almost no impact on aggregate economic activity. Both nationally and at a broad regional level,
the industry’s impact on employment is less than 0.1 percent of total employment. In areas that are highly dependent on milk
production, impacts are likely to be greater. Because farm input (like machinery and fertilizer) production is located in
metropolitan areas—as is much of the upstream processing and distribution activity—dairy programs very likely have greater
impacts on metropolitan than on nonmetropolitan employment. Moreover, a comprehensive assessment of dairy programs’
impacts on the national economy should consider the costs associated with additional taxes required to cover dairy program
budgets.
25
ADI 08
Fellows
Dairy Aff
No Trade Leadership Now
The Farm Bill devastated US trade leadership
Sumner, 2002
Daniel, Director of UC Davis Agricultural Issues Center. “Implications of the US Farm Bill of 2002 for agricultural trade and
trade negotiations” Australian Journal of Agricultural and Resource Economics 47.1 (p 99-122)
A few comments collected in May by farm journalist Jim Wiesemeyer (2002) from around the world reinforce these
points. China’s vice minister of trade Long Yongtu asked, ‘After the U.S. Congress adopted such a bill, why can we not
do similar things?’ He said USA actions like the Farm Bill have already ‘had a negative impact on enforcement of
China’s commitments to the WTO’. The Financial Times of London begins its editorial on May 29, 2002, ‘With its new,
grotesque farm subsidies, the U.S. has let the European Union off the hook. Trade liberalization was supposed to be
one of the dis- ciplines that would push the EU to reform its absurd Common Agricultural Policy. But having
surrendered to protectionism, Washington is in no position to ﬁght’. It later wrote, ‘Washington’s reversion to huge
subsidies tied to production removes … pressure [for reform of the CAP] and leaves the international campaign for
agricultural reform with little hope’. The heads of the WTO, World Bank and the IMF, in a joint letter, wrote, ‘How
can leaders in developing countries or in any capital argue for more open economies if leadership in this area is not
forthcoming from wealthy nations?’.
US wont be able to meet its AMS burden due to 2008 Farm Bill program
Suppan and Murphy. 2008

Steve and Sophia, Institute for Agriculture and Trade Policy Commentary on www. iatp. org) TWN Info Service on Trade and
WTO Issues The 2008 Farm Bill and the Doha Agenda
July 17 2008
The 2008 Farm Bill introduces a new optional program for farmers called the Average Crop Revenue Election, or ACRE.
ACRE is an income insurance program that is meant to protect farmers against both low yields and price drops. Crop
insurance, including that covered in the Farm Bill, protects only against crop loss or low yields. ACRE would also protect
against a price drop resulting from a policy not affecting yields (e. g. removal of the US tariff on ethanol imports). ACRE
has also been presented as a way to make US commodity programs more WTO compliant by factoring yield (and not just
price) into domestic support payments. US price-derived counter-cyclical payments (support to counter price drops) were ruled
WTO illegal in the US Upland Cotton Subsidies trade dispute. The ACRE link to average yield, however, makes it likely
that other WTO members will seek to classify the program in the amber box, since part of the Aggregate Measures of
Support formula includes "quantity of production" as an AMS payment factor (Agreement on Agriculture, Annex 3, paragraph
8). If ACRE is AMS classified, the US could have difficulty meeting its proposed AMS reduction commitments. The
ACRE baseline is derived from the five-year state average yield (after removing the best and worst yield years) and two-year
national average price for the most recent crop market years.
26
ADI 08
Fellows
Dairy Aff
No Trade Leadership Now
Farmers will take advantage of the Farm Bill due to high food prices further putting pressure on US amber box
limits

July 17 2008
The payment formula is based on the average annual market price for the crop concerned over the previous two years. The last
two years, 2006 and 2007, saw record-high crop prices. The likely fall in commodity prices ahead could trigger very
large payments to US farmers under ACRE's provisions if a large number of farmers choose to sign up for the program.
ACRE price, yield and program enrolment factors make it difficult to predict the amount of program payments the US would
report to the WTO Committee on Agriculture.
Cutting Amber Box subsidies key to meet new WTO regulations

July 17 2008
There is no simple correlation between Commodity Title payments and the WTO's AMS definitions, but for comparison, the
current authorized limit for AMS for the United States is $19.1 billion per year; the US commitment as of the May 19th
version of the Doha agreement would reduce that to $7.6 billion per year.
In 1995, the US spent less than its 2000 target of $19.1 billion, but in subsequent years, spending increased. Most experts agree
that the US broke its spending limits under WTO rules, but the US notifications categorized spending in such a way as to
impede accountability.
27
ADI 08
Fellows
Dairy Aff
Trade Leadership Solvency
Removal of US farm subsidies key to US trade leadership
Sumner, 2002
A few comments collected in May by farm journalist Jim Wiesemeyer (2002) from around the world reinforce these
points. China’s vice minister of trade Long Yongtu asked, ‘After the U.S. Congress adopted such a bill, why can we not do
similar things?’ He said USA actions like the Farm Bill have already ‘had a negative impact on enforcement of China’s
commitments to the WTO’. The Financial Times of London begins its editorial on May 29, 2002, ‘With its new, grotesque
farm subsidies, the U.S. has let the European Union off the hook. Trade liberalization was supposed to be one of the dis-
ciplines that would push the EU to reform its absurd Common Agricultural Policy. But having surrendered to
protectionism, Washington is in no position to ﬁght’. It later wrote, ‘Washington’s reversion to huge subsidies tied to
production removes … pressure [for reform of the CAP] and leaves the international campaign for agricultural reform
with little hope’. The heads of the WTO, World Bank and the IMF, in a joint letter, wrote, ‘How can leaders in
developing countries or in any capital argue for more open economies if leadership in this area is not forthcoming
from wealthy nations?’.
US dairy policy must be beyond challenge to ensure markets for ANY US agricultural products
Johanns, 2006.
Mike. US Agriculture Secretary at the National Milk Producer Federation. November 2, 2006.
Now, the last thing I emphasized about farm policy is that it should be "beyond challenge." This is where trade comes
in. As you know, there have been many challenges to our subsidy program in the World Trade Organization. Brazil has
expressed concern about our marketing loan and our countercyclical payments. And, as you know, we -- despite aggressively
defending it -- lost a cotton case some months ago, and Brazil is now back asking for WTO, challenging whether we have
complied with the ruling. And again, what are they raising? They are raising the marketing loan program and countercyclical
program as problems. Now some of you may be out there thinking, "Mike, I hear about this all the time and why are we
bothering? Why are we allowing the World Trade Organization to be involved in resolving trade disputes? Why should we do
that? Why is it in my interest that you're back there in Washington trying to defend a cotton case against the World Trade
Organization dispute?" Now, if you're in an area where they raise cotton, I can tell you that well over half of that cotton needs
to find an export market. If you're in an area where you drive down the road and you see rice being raised, I will tell you that
50 percent of that rice needs to find an export market. If you're in an area like the area where I grew up, where you raise corn
and soybeans, about one in every third row, as you drive down and look down those rows, needs to find a place in the export
market. It is a significant piece of what we do. That's why "beyond challenge," in my judgment, means a lot to the U.S. farmer
and rancher. Now, our exports have been good news for producers. As American agricultural productivity continues to increase
by about 2 percent each year, our population only increases by about 1 percent. So it's critical that we continue to open more
markets for our products.Ladies and gentlemen, I will tell you what you know already: Your productivity in the dairy industry
is nothing short of remarkable. I would not have dreamed, growing up on that dairy farm, that a cow could produce at the level
that it is producing today. It's unbelievable. In order to increase market access, we need to continue to adopt policies that
prevent those WTO challenges, policies that encourage a level playing field and opportunity for you to sell your products into
that export market.
28
ADI 08
Fellows
Dairy Aff
Trade Leadership Solvency
Dairy Price Supports key issue in any WTO negotiations
Hilker 2008
Doha round WTO negotiations may or may not be completed by the time the new farm bill is debated in earnest. But it is
clear that any new agreement will further ratchet down permitted amber box farm programs and further limit
exemptions. Consequently, the dairy price support program, at least as currently structured, would appear to be in
trouble. However, the U.S. may — and should — negotiate a change in the manner in which price supports contribute to
aggregate measures of support. It is unreasonable to compare a low domestic safety net price with a fixed world market price
that was negatively affected by large export subsidies. And with market prices well above support, it is unreasonable to
argue that the dairy price support program transfers income from consumers to producers.
US trade leadership key to free trade
US lack of cooperation jacks free trade world wide by encouraging protectionism and retaliatory market
distortions
Sumner, 2002
Second, some other countries now see the USA as a major source of distortion in world markets and will focus attention
on negotiating lower USA subsidies while devoting less effort to open- ing markets in places such as Korea, Japan or
Europe. The Cairns group in particular, by focusing on the US Farm Bill rather than import barriers in the USA and
other places may be focusing on the less important distortions. Policies such as USA, Canadian and EU dairy trade
barriers are likely to face less pressure for reduction. Third, some countries, especially in the developing world, are more
likely to accept that production-distorting farm subsidies are an essential part of agricultural policy and are more likely
to adopt such policies. None of these implications make it easier to achieve more open world markets for agricultural
trade.
29
ADI 08
Fellows
Dairy Aff
AT: Doha collapsed already
The Doha Round is never dead!
Business Standard 2008

(“WTO Director General says DOHA Round Not Dead” http://www.business-
standard.com/india/storypage.php?tp=on&autono=43534 July 30th 2008)
The failure by trade ministers from 30 countries to seal a deal on the world trade talks does not mean the end of the
Doha Round of negotiations, which has been going on for more than seven years, World Trade Organisation director
general Pascal Lamy said today.
The talks stalled because India and United States refused to budge on the issue of special safeguard mechanism (SSM). The
mechanism comprises a set of norms that allow developing countries to raise tariffs temporarily in order to deal with import
surges and price falls in farm products.
A WTO release today quoted Lamy, saying that the Doha Round talks will continue. “We will need to let the dust settle.
It is probably difficult to look too far into the future at this point. WTO members will need to have a sober look at if and
how they bring the pieces back together. “This is certainly not going to strengthen the multilateral trading system; it will not
improve the system which has provided all its members an insurance policy against protectionism over the last 60 years.
30
ADI 08
Fellows
Dairy Aff
AT: International trade arguments
Dairy Subsidies are fundamentally different they influence the domestic market-
Hilker, 2008
International markets have become important for U.S. dairy producers as strong world demand, a weak U.S. dollar,
and a drop off in some competitor’s (e.g., Australia) milk production conspired to make U.S. dairy products very
competitive. Those outlets should be important in the coming year for U.S. dairy commodities. However, the U.S. system is
currently set up to pay the most attention to the domestic fluid market and will respond primarily to those signalsPrice
Support Program health LinksUS Department of Agriculture July 2004 Fact sheet for the Milk Price Support ProgramUnder
MPSP, in order to facilitate use in food assistance programs, products purchased in bulk are repackaged in forms
suitable for sales and donation. These services, which are contracted through competitive bids, include: repackaging bulk
butter into 1 pound prints; processing butter into butteroil; processing block or barrel cheese into 5 pound and 2 pound
loaves; and instantizing and/or fortifying NDM with vita-mins A & D into 25.6 ounce, or 4 pound bags
AT: Small Farms DA

Small dairy farms are inefficient, large dairy operations are inevitable and good
Jacoby 2001
(Jeff - op-ed columnist for the Boston Globe since 1994 - April 25, 2001 “Socialism Does Milk Good?”
http://www.capmag.com/article.asp?ID=498 accessed 7-30-08 [nfb])
A 1996 federal statute authorized the compact in response to the supposed "crisis" of dairy farms going out of business.
Unless this decline were reversed, Congress was told, local supplies of milk would dry up, precious open space would be lost,
and a lifestyle rich in tradition -- dairy farming -- would be gone forever. Most of this was nonsense, beginning with the notion
that dairy farming was in danger of disappearing. To be sure, the number of farms with milk cows has steadily shrunk --
there were 4.7 million of them in 1940; fewer than 140,000 in 1996. The number of milk cows has likewise been dropping --
from 23.6 million in 1940 to just 9.4 million in 1996. But these numbers simply reflect the fact that dairy farming, like all
farming, has become dazzlingly productive. Despite the 60 percent plunge in the number of dairy cows since 1940, US
milk production has skyrocketed from 109 billion pounds per year to more than 160 billion pounds. Fewer farmers, milking
fewer cows, are producing more milk than ever before. Family farms have been shutting down. But that too is a function of
modern agriculture. Dairying today depends on economies of scale. Mom-and-pop farms are easy to romanticize, but
they require a grueling amount of work and don't make much money. They are vanishing not because milk is underpriced,
but because they represent an obsolete and uncompetitive way of providing milk to consumers. Making families overpay
for milk isn't going to change reality. In any case, if the dairy compact was supposed to save small farms, it has proven a bust.
Between 1995 and 1997 -- the two years before the compact began its price-jacking -- 34 Massachusetts dairy farms and 117 in
Vermont went out of business. In the first two years after the compact kicked in, farm losses totaled 44 in Massachusetts and
153 in Vermont. Not only didn't the compact stop dairy farms from dying, it didn't even slow the rate of death. The reason is
that revenue from the milk surtax is divvied up according to milk production. Bigger farms produce far more milk than the
mom-and-pop operations, and so get far more money. Small farms receive only a few thousand dollars a year, not
nearly enough to make them economically viable. Yet they are the ones that are failing: Farms with herds of 50 or fewer
cows account for three out of every four dairy farms lost in New England.
31
ADI 08
Fellows
Dairy Aff
Solvency – Milk Marketing Orders
Cutting dairy marketing orders would boost innovation in the dairy industry, stabilize prices and help consumers
Edwards 2007
(Chris - director of tax policy at the Cato Institute - July 6, 2007 “The Madness of American Milk Prices”
http://www.cato.org/pub_display.php?pub_id=8479 accessed 7-30-08 [nfb])
As Congress considers a major farm bill in coming weeks, it has an opportunity to cut wasteful subsidy programs and cut food
prices for average families. Dairy programs would be a great place to start, since milk prices have soared in recent months.
Consider the illogic of federal dairy policies. They jack up milk prices for millions of families at the same time that other
programs, such as food stamps, aim to reduce food costs. And although federal law generally prohibits cartels, a federal dairy cartel
enforces high milk prices. If Coke and Pepsi got together and agreed to hike prices, they would be prosecuted. But with milk, raising
prices is government policy. The trouble started in 1930s with "marketing order" regulations. Those rules set minimum prices that
dairy processors must pay to dairy farmers in 10 regions of the country. Today, about two–thirds of milk is produced under
federal marketing orders, and most of the rest is produced under similar state schemes such as California's. Marketing orders limit
competition, because entrepreneurs are not allowed to supply milk at less than the government prices. The system also
restricts milk from lower–cost regions, such as the Midwest, from gaining market share in higher–cost regions, such as the
Southeast. Government data show that residents of Cincinnati paid an average $2.68 for a gallon of milk in 2006, while those in New
Orleans paid $4.10, and government policy is largely to blame. On top of marketing orders, Congress added a dairy price–support
program in 1949. This program helps to keep prices high by guaranteeing that the government will purchase any amount of cheese,
butter, and dry milk from processors at a set minimum price. In 2002, Congress added an income support program for dairy farmers,
which distributes cash payments whenever prices fall below target levels. Perversely, this program causes overproduction and thus
downward pressure on prices — in direct opposition to the price support program, which tries to raise milk prices. To enforce
artificially high prices, the government imposes import barriers on milk, butter, cheese, and other products. Without those
barriers, consumers could simply purchase lower–priced foreign goods. Imports of cheese, butter, and dried milk are limited to
about 5 percent or less of U.S. consumption. All these policies add up to higher prices. The Organization for Economic Cooperation
and Development found that U.S. policies create a 26 percent "implicit tax" on milk consumers. That "milk tax" is regressive,
meaning that it harms low–income families the most. The Government Accountability Office compared U.S. dairy prices to world
prices over the period 1998 to 2004. It found that U.S. prices for butter averaged twice the world price, cheese prices were about
50 percent higher, and dry milk prices were 24 percent or more higher. Dairy entrepreneur Hein Hettinga started a dairy farm and
milk bottling plant in Arizona in the 1990s outside of the government system. He sold his milk to Arizona stores and to Costco in
California at 20 cents per gallon less than the government–regulated milk. Established milk businesses were not happy with the new
competition, and they spent millions of dollars lobbying Congress to intervene. At the behest of home–state dairy interests, Democrats
and Republicans teamed up in 2006 to change the law and crush Hettinga. Based on his experience, Hettinga lamented, "I had an
awakening … it's not totally free enterprise in the United States." U.S. dairy programs are Byzantine in complexity, but the ultimate
effects are to transfer wealth from average families to dairy businesses. In this year's farm bill, let's hope policymakers take the
side of average families for a change, and repeal the damaging milk cartel.
32

Dairy Aff (ADI)

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Dairy Aff (ADI)

Uploaded by

Copyright:

Available Formats

ADI 08

AT: Doha collapsed already...................................................................................................................................30

Tribune Business News 2007

The Dairy industry is key to the US economy

California Milk Advisory Board, No Date

International Herald Tribune 2007

Advantage 2 – Dairy Cartels

Advantage 2 – Dairy Cartels

Advantage 2 – Dairy Cartels

Advantage 2 – Dairy Cartels

Biodiversity loss risks extinction

Advantage 3 – Trade Leadership

US Trade leadership low- lack of cooperation in DOHA rounds, massive subsidies

Business Standard 2008

Advantage 3 – Trade Leadership

Advantage 3 – Trade Leadership

China View, 2008

Global protectionism leads to nuclear war

We have an ethical obligation to reject veal farming

Farm Sanctuary 2002

Advantage 5 – Nutrition Programs

Advantage 5 – Nutrition Programs

We have a moral obligation to feed the poor by supporting nutrition programs

T – MPSP is nearly all

The Milk Price Support Program is a domestic subsidy

MPSP = more subsidies

High milk prices = high food prices

AT: Milk Prices Low Now

MPSP hurts dairy industry

The MPSP is bad for the domestic dairy industry

MPSP hurts dairy industry

Dairy subsidies hurt the economy

US Dairy subsidies hurt the US economy

AT: Subsidies key to dairy industry

Dairy key to NY economy

Dairy Key to the Economy

The dairy industry is key to the US economy

Dairy not key to the economy

US dairy policy has a negligible effect on food prices

Federal dairy programs do not affect the economy

No Trade Leadership Now

The Farm Bill devastated US trade leadership

Suppan and Murphy. 2008

No Trade Leadership Now

Suppan and Murphy. 2008

Cutting Amber Box subsidies key to meet new WTO regulations

Suppan and Murphy. 2008

Trade Leadership Solvency

Removal of US farm subsidies key to US trade leadership

Trade Leadership Solvency

Dairy Price Supports key issue in any WTO negotiations

US trade leadership key to free trade

AT: Doha collapsed already

The Doha Round is never dead!

Business Standard 2008

AT: International trade arguments

AT: Small Farms DA

Solvency – Milk Marketing Orders

You might also like