May 28, 2003: Dairy marketing cooperatives in the
United States have voted to implement a voluntary supply management
program. The National Milk Producers Federation, representing
most American dairy marketing cooperatives, is redefining
how farmers work together, in an effort to balance supply
and demand for raw milk.
The target economic impact is seven dollars more in farmers'
pockets for every dollar that a dairy farmer is assessed to
participate. To succeed, this Cooperatives Working Together
program needs participation from at least 80 percent of the
nation's milk supply, and must reduce raw milk supplies by
4.6 billion pounds over 12 months.
It is not the first attempt at supply management by American
dairymen. In the past they have used refundable assessments,
milk diversion and whole herd buyouts to control milk inventory
and speed up price recovery. The Cooperatives Working Together
program will use farmer assessments to fund three specific
tools similar to previous projects: export assistance, reduced
production marketing and total herd retirement. But this time
there is a big difference - there is no government involvement.
It is a self-help program. Success depends on peer pressure
among U.S. dairy farmers and dairy coops.
Proponents of the program believe that government non-involvement
has advantages. The National Milk Producers Federation is
set for swift implementation by June 30. They hope to avoid:
a) extra red tape, b) politicians worried about deficits and
c) trade lawyers questioning legitimacy under international
Lack of government backing is also the biggest drawback of
this plan. How will American farmers feel about their neighbours
and milk buyers that pass on the opportunity to participate
in inventory control and forcing consumers to pay more for
milk? How many will seize on the next 12 months as an opportunity
to expand their enterprises?
This is worth watching. If this approach succeeds, the credit
will not go directly to American dairy farmers. This project
is driven by their cooperatives, with hope that independent
processors will also participate. Cooperatives and milk buyers
who decide to participate on behalf of their members and milk
shippers will hold back the assessments.
Participants in the food chain, aside from farmers and consumers,
are increasingly positioned to manage the supply of raw food
ingredients. As the number of players between farmers and
consumers shrinks to a few buyers, a few processors, a few
wholesalers and a few retailers, that opportunity grows.
In the U.S. dairy sector, farmers will have an indirect say
in managing the supply of milk because they own the cooperatives
involved. Thankfully, in Canada, dairy farmers have the support
of provincial government rules and federal policy to enable
their direct involvement in controlling milk inventories.
For more on the myths about hunger and the Canadian Foodgrains
Bank, a Christian response to hunger visit
- May 12, 2003: GMO
in food: The story we are not telling
- May 9, 2003: Walkerton
Inquiry Review: Public policy success equals clean drinking
water for all
- May 5, 2003: The
ethics of biotechnology: Discussion at the stakeholders'
conference goes beyond higher yields
- April 25, 2003: Conference
players agree: Quality, consistency will give edge to local
- April 18, 2003: Complex
land decisions must be based on values, not data
- April 9, 2003: The
emerging managed food chain
- April 3, 2003: Farmer
nominees for the Rural Red Tape Reduction Project
- March 28, 2003: Farm
- March 21, 2003: Myths
- March 7, 2003: Europe
Gets Innovative about Farm Subsidies
- February 21, 2003: Seven
ideas for Strong Rural Communities
- February 7, 2003: An
Action Plan for a Fresh Vision for Agriculture
- January 3, 2003: 2002
ag policy changes to have big impact in 2003
- December 13, 2002: Farmers
know ag’s “multiple-benefits”, but wonder
how to make them profitable
November 5, 2002: Intervening
in farm markets for the public good
- October 25, 2002: Standing
up to commodity agriculture
- September, 2002: Wishes
and dreams for Ontario agriculture
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