Dairy Industry Crushed Innovator Who Bested Price-Control System by Dan Morgan, Sarah Cohen and Gilbert M. Gaul:
Last March, Congress passed a law reshaping the Western milk market and essentially ending Hettinga’s experiment — all without a single congressional hearing.
Most U.S. dairy farmers work within a government system set up in the 1930s to give thousands of small dairies a guaranteed market for their milk and to even out prices for consumers. Farmers who participate in regional pools operated by the federal government or the states deliver raw milk to cooperatives or food processors. They get a guaranteed price, whether the milk ends up in a gallon jug, cheese, butter or ice cream. In Arizona and other federally regulated regions, the Agriculture Department uses a formula to set the price processors pay for raw milk, issuing “milk marketing orders.”
Developed for a bygone era of small dairies and decentralized milk plants, the system lives on when 3,000-cow dairies are not uncommon and huge cooperatives and food companies dominate the business. Business groups, fiscal conservatives and some dairy organizations have called for Congress to overhaul the complex system of protections and subsidies, which they say is costly to taxpayers and consumers. A recent USDA study acknowledged that “dairy programs raise the retail price” of milk. The watchdog group Citizens Against Government Waste estimates that the programs cost U.S. consumers at least $1.5 billion a year.
These programs are effectively taxing everyone to pay special benefits to a few. Now perhaps you believe in this case milk production and purchase should not be part of the capitalist market system. That is a possible opinion. Somehow I doubt the politicians that take huge payments from huge dairy cartels to stop competitors from selling milk are doing so because they believe the market is incapable of delivering milk just as it delivers soda, water, hamburgers, cereal, pizzas, soup… Regulation is needed in various ways in the market. The problem is every special interest tries to claim the market needs to be regulated in a way that gives them benefits and the correlation to market needs and action seems to be very clouded by money received by politicians.
It just seems more likely they are willing to do what they are paid to do. But others can see it differently. Certainly the whole political system seems very beholden to special interests to pay rather than to making decisions that are best for the country. That could change if political leaders choice to lead but a majority doing that is unlikely. More likely it will continue until the voters don’t allow special interests to reap huge rewards on the backs of the general public through congressional action. Remember last year when Congress forbid the Medicare system (with a law) from negotiating for lower drug prices?