April 2002
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When it comes to dairy policy, that line has definitely been crossed during discussion of one aspect of the pending 2002 Farm Bill: the dairy import assessment. The National Milk Producers Federation has been working for several years to legislate that importers of dairy products pay the same promotional checkoff assessment that U.S. farmers have been paying since 1984. Both the House and the Senate included the dairy import assessment in their respective versions of the Farm Bill, and although the final version of the Farm Bill is still being debated as this is written, we're confident the import assessment will remain in the bill.
That's despite the best efforts of dairy importers and foreign governments to remove the provision, using tactics that can, at best, charitably be called “whoppers” (as in “a whopper of a joke”), and at worst, rightfully be called downright deceptive. If this campaign were happening just on April 1st, it might be more tolerable. But unfortunately the disinformation campaign has dragged on now for several months, and it's time to set the record straight on a couple issues.
The import assessment's inclusion in the Farm Bill has been widely endorsed by the members of NMPF. When they hear the facts about the issue, farmers readily agree that, as a basic matter of fairness, those importing products such as cheese and Milk Protein Concentrate should pay their fair share into our national promotional programs. Those who have been taking advantage of the world's largest, most lucrative dairy market should be able to ante up a small amount (just 1.5 cents per pound of cheese) to continue to build that market. That's the way it works for America's farmers. If Australia's dairy farmers want to compete here, they should also pay the same tiny amount.
Other agricultural commodities have already established a long-running precedent for importers to pay into dairy's promotional checkoff. All the major commodities that have U.S. checkoffs, including beef, pork, and cotton, assess imports for purposes of domestic promotion. If those bringing Australia's beef products into the U.S. can pay a checkoff to help promote their products to America's 275 million consumers, why can't Australia's dairy-producing counterparts help out?
But dairy importers, confronted now with the prospect of having to kick in their penny's worth, have conducted a nasty campaign designed to fool people about the import assessment. They've claimed that such an assessment would violate the terms of the World Trade Organization. It doesn't, because the WTO allows for such assessments. If checkoffs were illegal, then why hasn't there been a single challenge in the WTO to the beef, pork, etc. assessments so far? The short answer is that there's no problem with them, that's why.
The importers also claim that foreign governments will try to use the imposition of a promotional assessment as a means to get the U.S. to eliminate our Tariff Rate Quotas on certain dairy products. That's also a joke, because the Australians, Europeans and others have been trying for years to do the same thing. They don't need the checkoff assessment to spur them on – they'll keep trying to eliminate our TRQs regardless of the assessment (remember, they want access to our consumers, checkoff or not). But their saying they want TRQs eliminated will not result in it happening. NMPF wouldn't be pushing this provision if that were the case.
What's more, the fact is that most of the dairy products coming into this country are not under quota to begin with. In 2000, only 3.2 billion pounds of imported milk products were assessed a tariff – the majority, 5.1 billion pounds worth, paid no tariff at all.
In fact, one of the main reasons why importers oppose the import assessment is that they will have to reveal exactly how much Milk Protein Concentrate they are shipping into the U.S. Currently, we have only vague records about the expanding flow of MPC into the U.S. The import assessment will help us verify those amounts, because dairy proteins such as MPC will have to pay the 15 cent per hundredweight equivalent.
Imported dairy products, which have risen in volume from 3.1 billion pounds in 1995 to 5 billion in 2000, also have been growing at a faster rate lately than domestic production, disproving the importers' assertion that they don't benefit from efforts to expand the U.S. dairy market. The numbers speak otherwise.
There have been other outrageous claims that the importers have made, such as that by permitting importers to have representation on the National Dairy Board (all of two seats), they'll be able to hijack the program to their benefit. Now, I've been in a room many times with several dozen dairy farmers, and have never sensed that 36 of them (the number of farmers on the NDB) would let two others get the best of them. I'll put my money on our farmers over the importers any day of the week.
And ultimately, that's really the best news about the campaign against the import assessment. Our legislators are listening to America's farmers, instead of dairy importers and processors who import large amounts of cheese and MPC. Their campaign hasn't worked. The sponsors of the legislation, including Wisconsin Senator Russ Feingold and Representative Tammy Baldwin, haven't backed down. They're not fooled by the foolish claims of importers, and thankfully, that's no joke.
