President Reagan has asked the International Trade Commission to investigate whether imports of powdered milk protein should be curbed. Such quotas would please U.S. dairy farmers, who were antagonized when the administration moved earlier to cut milk price supports.
Reagan asked the ITC for the investigation even though Agriculture Department experts have said protein import quotas would cost consumers far more than they would benefit farmers.
Reagan reportedly promised Senate Republicans in March that he would seek the ITC study, and in mid-June 11 Republican senators led by Robert J. Dole (Kan.) wrote the president to remind him of his promise.
Dairymen for several years have wanted quotas on casein, pure milk protein used in foods from coffee creamer to imitation cheese, as well as in such products as wallpaper paste.
A few days after Dole sent his letter, Agriculture Secretary John R. Block wrote Reagan urging an ITC investigation, a necessary formality for such an inquiry. Block cited "the principal finding" of a department report completed June 1 that the government would save $300 million per year if no casein were imported.
The figure was based on the theory that if imported casein were unavailable, domestic milk products would be used instead. Therefore, consumers and businesses would purchase more milk, and the government would have to buy less in the price support program.
The report notes that the $300 million figure is irrelevant because under the law the government can cut imports only in half. The report says this would reduce government purchases of milk only $9.3 million while costing consumers almost $115 in higher prices.
Block's letter states that casein imports "materially interfere with the price support program for milk." However, the report says that any substitution of casein for milk, which could be prevented by a quota, is "not enough to significantly affect . . . the dairy price support program."
Dairy organizations have been urging an ITC investigation of casein for several years, said Doni Dondero, a spokesman for the National Milk Producers Federation. Casein definitely replaces domestic milk, she added, but she cited no figures.
"It's just phony baloney," said Arnold Smith, a spokesman for the Committee to Assure the Availability of Casein, a coalition mostly of food companies that use casein. Smith said limits on casein imports would not help the dairy industry or save government money, but might make some products such as coffee creamer prohibitively expensive.
No good substitute exists for casein in most uses, Smith said. Casein made from domestic milk would be three times more expensive than imported casein because of federal price supports, he added.