THE DAIRY VOTE in the House of Representatives last week wasn't even close: the cows trampled the people. Dairy price supports are already too high, and drawing forth too much milk. The cost of the dairy program, in which the government buys up the surplus, will be about $2 billion this fiscal year. House Minority Leader Bob Michel and Democrat James Olin of Virginia, a member of the dairy subcommittee, proposed reducing the supports. They had on their side both the administration, which wants to cut costs, and consumer groups and food processors, who, from their opposing perspectives, want to cut prices. It didn't help; their amendment was beaten, 244 to 166.
The vote left in place the competing recommendation of the House Agriculture Committee, which is to raise dairy price supports. Normally this would bring on increased production and add to government costs. To avoid these results, the committee put a kind of governor on its bill. The higher supports would mean higher prices in the stores, and larger incomes for producers. The government would take back some of this increased income through an assessment against the producers. The assessment would be used to pay some farmers to cut their herds and to buy up surplus production in excess of so many pounds per year. From the government's standpoint, the higher supports would be self-financing, in the sense that consumers would pay more, but taxpayers would not. Only just before it defeated the Michel-Olin amendment the House also voted to limit any assessment to 50 cents per hundredweight. Proponents say that 50 cents will be plenty to cover all costs. But others are not so sure, and the farmers would now have limited liability.
The dairy vote is a metaphor for the farm bill generally. The farm problem is that not enough dollars are going into agriculture to support all the farmers in the fields. Either more farmers fail or Congress finds more money; the question is where. There is not much more to be had from the Treasury; farm program costs and the deficit both are already high.
To some extent Congress has thus been tempted to turn to consumers instead. The dairy program is one example. Another will come when the House turns to wheat and feed grains this week. Currently the government offers more for these commodities than world buyers are willing to pay, and a lot of grain is ending up in government bins.
To move the grain back into commerce, the committee voted to lower support levels, meaning the prices the government will pay. But the committee also approved an alternative under which farmers could trade even higher support levels for production controls. In theory, only enough would be produced to meet private demand. Prices would firm up, so that consumers would pay more -- but taxpayers would be required to buy less. Partly in the name of consumers, an effort will be made to strike this from the bill, too. We think that on many other grounds it is an unworkable idea, and should be struck. But producers are hurting and, as the dairy vote also suggests, the House is grasping at straws.