IN THE GALLERY of dubious issues invented in Washington, let history make room for casein, a substance that seems ideally suited for the conversion of molehills into mountains.
Casein is milk protein, and it is a marvelous product -- the dairy cow's answer to Kryptonite. It is used to make pharmaceuticals, glue, paper coatings, coffee whitener, artificial whipped-cream topping, baby formula, imitation cheese and probably the occasional kitchen sink.
Casein also makes a big political furor, thanks primarily to the dairy lobby, which seems determined to gain a symbolic victory on casein simply to demonstrate it can win on some issue. Any issue.
Hundreds of thousands of taxpayers' dollars have already been spent investigating casein. Now President Reagan's secretary of agriculture wants to cut the import of casein by half, a move his own department says would cost U.S. consumers $115 million.
Reagan has gone along by asking for yet another government study of casein, which will cost tens of thousands of dollars more. So tomorrow morning the International Trade Commission, the government agency empowered to investigate charges of unfair trading practices, begins this latest inquiry.
The story of casein is an example of the way lobbyists and members of Congress can seek out issues that might make them look good with voters at home and with the clients who hire them to influence government decisions. Import restrictions on casein would not measurably improve any dairy farmer's standard of living, but the lobbyists and some members of Congress have been working for such restrictions as though they were crucial to the farmers' survival.
Among casein's many unusual qualities is this: None of the stuff is "Made in U.S.A." This country is by far the world's leading producer of milk, but the government's dairy price support program does not cover casein. Therefore, producers would lose money if they manufactured casein, a product that comes from the same milk curds that go into cottage cheese. So all the casein used here must be imported.
That's the rub. America is a free-trading nation in principle, but not in agricultural products. Few agricultural commodities and no dairy products can come into this country freely, but casein is officially categorized as an industrial, not an agricultural, product. There is no limit and no duty on its importation, and it comes in at a cheap price compared to other forms of milk protein.
On the basis of these facts, the American dairy industry, and particularly its representatives in Washington, have decided to make a big -- yea, an enormous -- deal out of casein.
The principal figure in this effort is Patrick B. Healy, secretary of the National Milk Producers Federation. Healy contends that imports of casein "must be controlled" to preserve markets for U.S. dairy products and to reduce the cost of the government's dairy price support program. Healy has been fighting for restrictions on casein imports since Earl Butz was secretary of agriculture.
The dairy industry's friends in Congress have been echoing Healy's certainty about the ill effects of casein imports as if they had read the message on a new stone tablet. "Look at casein," shouted Rep. James M. Jeffords (R-Vt.) in a recent House debate. "If we just eliminate casein imports, we do away with 3.3 billion pounds" of milk surpluses.
The dairy industry argues that if casein imports were limited, users would turn to nonfat dry milk as a substitute, increasing consumption of that product. That would reduce government surpluses of nonfat dry milk, the industry says, thus lowering the cost of the dairy price support program.
If the program can be made cheaper, the industry argues, there would be less justification for holding down the basic dairy price support.
This is the industry's line. It has all the intellectual sinew of a cover story. In fact, dry milk cannot be used for most of casein's uses. There wouldn't be much substitution, according to all the government studies, and according to industry officials, too. The suspicion is irresistible that the dairy lobby in Washington is primarily interested in casein as a fight it might win.
"It's a classic example" of the way lobbyists look for issues to score points on, according to Ellen Haas of the Community Nutrition Institute, a "public interest" lobbying organization. "They had to win on something."
It is indisputable that the dairy lobby has not been having one of its best seasons. Tough and resourceful as ever, it has been unable to avoid the repercussions of huge government-owned surpluses of dry milk, cheese and butter -- surpluses produced in part by the lobby's past successes in raising basic dairy price supports.
This year dairy farmers are hurting. Their prices are not keeping up with inflation, and their real incomes will fall. Healy and others in Washington who have to explain these unhappy developments to their troops presumably would like to have a victory on casein to balance the bad news.
Aa an official of one of the big dairy coops put it, action restricting casein imports would have "a tremendous psychological impact. It's all we've got. You've got to get something out of Congress."
One of the dairy lobby's traditional advantages has been tenacity, and the casein crusade is no exception. Healy has been pressing it for years, and in 1979 he persuaded the House Ways and Means Committee to ask the International Trade Commission to investigate the impact of casein imports.
Unfortunately for the dairy lobby, the ensuing study did nothing to bolster its case. The ITC concluded that there was "virtually no relationship between imports of casein and the purchases of nonfat dry milk under the price support program." The commission found that powdered milk could not be substituted for most uses of casein, which depend on its unique physical properties.
The dairy lobby rejected that finding and began to press the Carter administration to conduct another study, this one inside the Agriculture Department. Bob Bergland, Jimmy Carter's secretary of agriculture, held the dairy lobby off for months. But in the spring of 1980, shortly before the important Wisconsin ("America's Dairyland") primary, he put the new study into motion. "We can't prove there was a connection between the two events," a smiling civil servant at the department said later.
Last June the department's study was published. It concluded that the Trade Commission had been correct -- neither import quotas nor a duty on casein would significantly affect consumption of powdered milk.
Under the law, it would be possible either to reduce imports by up to half the amount imported in a representative recent period of time, or impose a duty of up to 50 percent of the value of the casein. The Agriculture Department's study concluded that a quota roughly cutting imports in half would convince most users of casein to do without the stuff or find substitutes based on soybeans, not powdered milk. The report estimated that just 10.3 million additional pounds of powdered milk would be consumed each year. (The government currently has 800 million pounds of powdered milk in storage, and is adding millions more each week.)
A 50 percent import duty would result in "no increase in the use of domestically produced skim milk solids," the report said. Either move, it said, would add tens of millions of dollars to the retail costs of products based on casein.
Despite the real conclusion that no legal quota or duty would significantly affect the consumption of powdered milk, the lobby preferred this sentence in the report:
"If no casein had been imported in 1980, commercial disappearance (that is, use) of domestic skim milk solids would have increased by the equivalent of 333 million pounds of nonfat dry milk. Thus, government purchases of nonfat dry milk would have been 333 million pounds lower, saving about $300 million on Commodity Credit Corp. outlays (for the purchase of surplus milk)."
Kenneth Clayton, author of the report, admitted in an interview that this hypothetical proposition has no basis in reality, not least because there would be no legal way to block all imports of casein, and even the dairy lobby says it doesn't want to do that. (Much casein is used for pharmaceutical products and baby formula for children who can't digest milk.)
Moreover, there would never be full substitution of milk for casein. Clayton said of this figure, "Not that it was very realistic... but we needed a base."
Realistic or not, friends of the dairy industry like the number. Rep. Thomas E. Petri (R-Wis.) used it in a recent House debate. Noting that the U.S. imported 152 million pounds of casein last year, "the equivalent of 333 million pounds of nonfat dry milk," Petri told the House: "All or most of this amount of milk may have been sold on the commercial market if it were not for the imported casein."
Later Petri was asked for the basis of this contention. "It just says 'could have,'" Petri said of his statement on the floor. He said he knew the Agriculture Department had concluded that milk could not be substituted for casein, "and that could well be true." He was speaking of a hypothetical case in which the government banned all casein imports, he said.
Sen. David Boren (D-Okla.) made Petri's use of figures look conservative in a Senate debate. Last year's casein imports displaced "upward of 4 billion pounds of domestically produced skim milk," Boren declared solemnly, offering no rationale whatsoever for his assertion.
In private conversation, some dairy lobbyists argue that the real problem with casein is prospective -- that its use is growing fast and could take off if not controlled. But the facts don't sustain this contention either.
This year, it appears, casein imports will total about 135 million pounds, some 17 million pounds less than last year and roughly the same level as in 1970. Casein imports jump up and down from year to year.
It is true that an increasing amount of casein goes into food products, particularly imitation cheese. Most of that apparently ends up in pizza.
Imitation cheese made with casein is cheaper -- and much less tasty -- than the real thing. There is a growing market for the stuff, part of it for straight imitation cheese eaten by people on diets restricting their intake of animal fats.
However, it isn't easy to make a case that casein imports -- or anything else -- is holding down consumption of real cheese. Americans are on a cheese binge. From 1970 to 1980, consumption of real cheese in this country grew from 2.3 billion to 4 billion pounds. This is the only segment of the dairy industry that is booming.
The dairy lobby and its friends in Congress seem to realize that they cannot make too strong a case for a significant cut in casein imports, so they have recently taken a different tack.
Originally the industry and its supporters sought a "zero quota" in casein imports, as Healy noted in a recent interview. (Now he says charges that the industry wants to exclude all casein imports are "ridiculous, ridiculous.") Then the lobby went for a quota that would cut imports by more than half.
But in September, Sen. John Melcher (D- Mont.), one of the dairy lobby's staunchest allies, introduced a new resolution in the Senate calling for a quota of about 140 million pounds a year, the average level of imports over the past five years. The Senate actually endorsed this proposal in a nonbinding attatchment to its version of the farm bill.
Asked why the industry had modified its objective, Healy said it was a matter of "what can be obtained." Neither house of Congress appeared willing to go along with deeper cuts, Healy said. "It's extremely important that we do cap these imports at some point," Healy added. "More and more erzatz foods are beipurcng developed from it," he said, noting that this seemed to be a pattern in other foodstuffs, too. "These foods that we have eaten for millenia, that have nurtured us to where we are, should not be tampered with," Healy added.
This latest gambit leaves the industry in a quandary. It sought an International Trade Commission investigation on the ground that the current level of imports "materially interferes" with the dairy price support program. Now the industry seeks an import quota that would preserve the current level of imports.
This is one of the issues the ITC will have to deal with at the hearing that begins tomorrow morning.