In an effort to encourage a fresh supply of lobsters in the finer restaurants in Chicago, the federal government will provide a price guarantee to farmers to add salt to Lake Michigan and, subsequently, start growing lobster colonies.
Sound crazy? Does it strike you as an outrageous act of Congress interfering in the free market? Of course this is not going to happen to the lobster industry. Modern technology guarantees that fresh lobster, direct from Maine, can be purchased in any restaurant in America. But welcome to the world of federal dairy policy. This policy, which has been in place for the past 60 years, makes milk the only product in America that faces price discrimination based on where it is produced. Today Congress will vote on whether to continue this outdated policy -- or Moo-Voo economics, as I like to call it.
An interesting front-page news story on Monday explained the economic struggles faced by dairy farmers in southern Louisiana. The problem, milk prices that are too low to make farming profitable, is a common story throughout our nation. It is a story that I hear every day in my congressional district in rural western Wisconsin.
The Post's article accurately described the reality of a family farm in Loranger, La., struggling to stay in business. While I sympathize with that family's problems, under the current milk pricing system those farmers receive $1.88 more per 100 pounds of milk than the farmers whom I represent in Eau Claire, Wis. Farmers in Ocala, Fla., receive $2.98 more for 100 pounds of milk. These farmers don't produce a better quality milk. Their milk doesn't contain any extra nutritional value.
In Wisconsin, America's Dairyland, the space where our citizens proudly wear chunks of cheddar cheese on top of their heads during sporting events, more than half of our family farmers have gone out of business during the past two decades. Five dairy farms end operations each day in Wisconsin.
The decline of the family farm has many causes, including increased productivity in the dairy industry, better employment opportunities off the farm for rural residents and increased competition to milk as a consumer beverage. The most significant cause of the decline of the Wisconsin family dairy farm, however, is the 60-year-old milk-pricing system.
This system, established by President Franklin Roosevelt in the 1930s, pays producers more for their milk the farther they farm from Eau Claire, Wis. The system was intended to be a short-term solution to the economic hardships in rural America created by the Great Depression. The Eau Claire formula was designed to ensure a nationwide supply of fresh milk. At the time, Eau Claire was the center of the dairy-producing universe. Over the past 60 years, however, the world has changed, making this system obsolete.
First, dairy farming has spread throughout the nation. More important, with the development of the interstate highway system and modern refrigeration, fresh milk can be shipped easily and cheaply to any grocery store in the country.
Eau Claire, while no longer the center of the dairy universe, is in the heart of the most productive region for milking cows. The moderate climate, abundance of water and competitive variety of cheese, ice cream and milk bottling plants make the Upper Midwest the ideal location to produce milk. This economic reality does not justify a federal pricing system that encourages dairy production in regions of the country that are not as well suited for milking cows. We don't have federal intervention to encourage orange groves in northern climates or a system that pays more for lobster fishing the farther you live from the coast of Maine.
In spite of the obvious unfairness of the current system, Congress this week will most likely act to keep that system in place. The U.S. Department of Agriculture, at the direction of Congress in the 1996 Farm Bill, has proposed a new, fairer system of milk pricing that eliminates Eau Claire as the focal point. This new system, while not perfect, would start to level the playing field for dairy producers.
Members of Congress from eastern and southern states will vote to block reform because their farmers benefit from an unfair system. In spite of strong opposition from consumer and taxpayer groups, and in spite of many of those members' past support for fair trade and less government intervention in the market, these members will vote to maintain artificial price differences in milk production.
Just as the shrimp farmers in Louisiana would not want a federal pricing system that encourages fisherman to start breeding and harvesting shrimp throughout the nation, the dairy farmers of Eau Claire do not want a federal milk marketing system that artificially discriminates against family farmers in America's Dairyland.
The writer is a Democratic representative from Wisconsin.