There are give or take a few moos, 11 million dairy cows in this country. That's at least a million more than are needed to produce the dairy products that consumers are prepared to buy. As science continues to produce new feed additives, growth hormones and breeding techniques, fewer and fewer cows will be needed. Congress recognizes that it has to curb the cost of keeping all these surplus cows in clover. But the farm bill approved this week by the House Agriculture Committee suggests that the road to reform is likely to be as crooked as a cowpath.
The most straightforward way to reduce dairy production would be to continue reducing gradually the dairy price supports that, when they were sharply increased in the late '70s, gave rise to the current surpluses. That approach has strong bipartisan support in the Senate. But letting market forces work, even gradually, requires Congress to admit it cannot foresee every contingency and ease every adjustment -- an admission that the House committee is apparently reluctant to make.
The House bill, drafted with help from the National Milk Producers Federation, starts from the presumption that the most humane way to lead a cow to slaughter is to pay its owner for doing so. Such a diversion program did succeed in temporarily slowing surplus accumulations last year, although not without disruptive effects in some localities. Paying farmers to cut herds, however, costs money, and farm programs already cost billions. So the bill levies an assessment -- essentially a producer tax -- on all milk still produced.
Why would dairy farmers want to pay themselves to cut their own production? One reason is that not all farmers would be equally affected. Relatively efficient farmers would end up paying most of the tax, while those on the verge of going out of business would tend to benefit. But the committee has also thoughtfully provided higher price-support levels to reimburse producers for their contributions to the diversion program.
Higher price supports, however, also mean that consumers end up paying much more for milk. That would add billions to family grocery bills as well as to the cost of government food programs for the needy. It would also cause consumers to buy fewer dairy products, and that means bigger surpluses. To keep that from happening, the bill set up a dairy product research and promotion effort -- to be financed by another increase in the producer tax.
Of course, sending thousands of dairy cows to slaughter is likely to drive down red-meat prices. To deal with that, the bill requires the federal government to cut purchases of other surplus commodities for donation to local school programs and buy red meat instead. Of course, you'd still have to worry that, since school lunches are already loaded with red meat, localities would then cut back their own purchases of red meat. Maybe you could require school kids to eat more. Or make them take doggy bags home to their parents. Of course, then the parents might buy less, but maybe you could add another requirement. . . Or maybe you could junk the committee bill and start over.