Debates Continue

Dairy Field, Oct 2004

MILC program becomes political football for presidential campaigns.

The Milk Income Loss Contract (MILC) direct subsidy program has become a hot topic in the presidential campaign, with both Republicans and Democrats looking to shore up support in key dairy states as election day approaches.

In an intense war of words during early October, the campaigns of President George W. Bush and U.S. Sen. John F. Kerry (D-Mass.) declared their candidates' support for extending MILC for two more years; each side believes the Midwestern dairy farmer vote will help its candidate win on November 2.

In the meantime, Congress - the governmental branch in charge of any changes to MILC - has recessed until mid-November so its members can go home to campaign for themselves and their presidential candidate of choice.

Legislation authorizing the MILC extension was inserted into an appropriations bill for the Departments of Veterans Affairs and Housing and Urban Development; that bill is awaiting action by the full Senate. Some lawmakers opposed the move, noting the extension would cost $2.4 billion and arguing MILC does not need to be reauthorized now because the program doesn't expire until September 30, 2005. In fact, six prominent senators from western states have written to the leadership of the Senate Appropriations Committee to formally protest the insertion of this "contentious amendment."

"The dairy industry would benefit from a more unified, market-oriented approach to dairy policy, rather than continuing another layer of government subsidies," says Chip Kunde, senior vice president for the International Dairy Foods Association (IDFA).

The MILC controversy began last month, when media reports started circulating that an April presentation given by a staff member of the U.S. Department of Agriculture (USDA) suggested that the Bush administration might eliminate MILC or institute some type of "milk tax" on dairy farmers due to budgetary concerns.

"If that's George Bush's plan, he should come clean and tell Wisconsin's farmers the truth now - not wait until they go to the polls in November," Kerry said in a statement.

The office of USDA Secretary Ann Veneman immediately refuted the claim. "The administration has no plans to impose a milk tax or cut support prices in any year. Period," the secretary's office reported.

Veneman noted the staff economist who gave the presentation had no authority to set policy for the department or the administration. She also alleged Kerry was playing politics in order to divert attention from his prior support of the Northeast Dairy Compact.

In his October 7 address to a Wisconsin audience, President Bush stated his support for extending MILC for two more years, saying he will work with Congress to reauthorize the program "so Wisconsin dairy farmers and dairy farmers all across the country can count on the support they need."

The president's remarks were delivered right before a new television ad launched in Wisconsin by the Democratic National Committee alleging a "secret plan" by the Bush administration to cut MILC would cost the state's farmers millions of dollars.

For more information, visit www.idfa.org.