Description

The U.S. dairy program, administered through federal and state
governments, subsidizes milk production and regulates dairy prices.
The current system costs taxpayers more than $4 billion per year in
subsidies and adds millions of dollars to the grocery bills of
American consumers and to the costs of food product
manufacturers.
By boosting prices, the dairy program encourages overproduction.
It also penalizes more efficient farmers in the futile attempt to
prop up smaller dairy farmers and stem the tide of decades of
changes in the dairy market.
In order to preserve domestic prices above the world prices for
dairy products, the U.S. government maintains prohibitively high
tariffs on imported dairy products. That invites scorn and
retaliation from our trade partners and is one more agricultural
program that exposes the United States to charges of hypocrisy as
it seeks to paint itself as a country in favor of free markets and
opportunity for all.
A better policy would be one that allows farmers to make their
living, like other entrepreneurs, from markets rather than a
government check. As Congress prepares to draft a new farm bill,
world dairy prices are unusually strong. Thus, this is the perfect
time for the government to fundamentally reform dairy policy in the
United States with minimal "disruption" to dairy farmers.