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Letter to Senator Tom Harkin, Chairman, Committee on Agriculture, Nutrition and Forestry and Senator Saxby Chambliss, Ranking Member, Committee on ...

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Date:
Location: Washington, DC


Letter to Senator Tom Harkin, Chairman, Committee on Agriculture, Nutrition and Forestry and Senator Saxby Chambliss, Ranking Member, Committee on Agriculture, Nutrition and Forestry

Senator Clinton Urges Closing Loophole in Dairy Promotion Checkoff Program

Loophole Disadvantages U.S. Dairy Producers While Dairy Importers Get A Free Ride

Senator Hillary Rodham Clinton joined several of her senate colleagues in calling for action on a fundamental issue of fairness concerning imports under the dairy promotion checkoff program. In a letter, the lawmakers urged Senator Tom Harkin, Chairman of the Agriculture, Nutrition and Forestry Committee, and Ranking Member Senator Saxby Chambliss, to use the upcoming Farm Bill to close a loophole that allows dairy importers to share the benefits of dairy product promotion but pay none of the costs.

"This is an issue of fairness and one that needs to be addressed so we can level the playing field for our nation's dairy farmers," said Senator Clinton. "Importers are enjoying the benefits of this growing market, but not pitching in a penny to help. I urge my colleagues to fix this loophole in the upcoming farm bill so that the dairy promotion assessment is applied to diary importers, and not just to our domestic producers."

Worldwide diary imports have made significant gains in the U.S. market, increasing in value from $830.3 million to $2.335 billion from 1989 to 2006. Every year U.S. dairy farmers contribute $270 million to promote dairy products, while importers share the benefit of this growing market for dairy products, but pay none of the promotion costs. In the 2002 Farm Bill, Congress required the dairy promotion checkoff program to be applied to imported dairy products. However, because of technical objections to the structure of the program, this provision was not implemented.

The technical fix would extend the dairy promotion checkoff to the small fraction of U.S. producers not currently covered, which represent only 0.44% of U.S. milk production in 2006. Once this technical adjustment to the program is made, the U.S. can level the playing field for the vast majority of dairy farmers and begin applying the assessment to imported dairy products, as Congress sought to do five years ago.

The letter to the Chairman and Ranking Member follows -

October 22, 2007

Senator Tom Harkin, Chairman
Committee on Agriculture, Nutrition and Forestry
United States Senate
328A Russell Senate Office Building
Washington, DC 20510-6000

Senator Saxby Chambliss
Ranking Member
Committee on Agriculture, Nutrition and Forestry
United States Senate
328A Russell Senate Office Building
Washington, DC 20510-6000

Dear Chairman Harkin and Ranking Member Chambliss:

We write to you regarding a fundamental issue of fairness concerning imports under the dairy promotion checkoff program that we urge you to address in the 2007 Farm Bill. Each year, U.S. dairy farmers contribute $270 million out of their own pockets to promote dairy products, including dairy ingredients used in other food products. Importers share the benefit of this growing market for dairy products, but pay none of the costs. Dairy farmers across the country have faced this unequal playing field and free-loading of imported dairy products long enough and believe that it is high time for Congress to put an end to this unjust situation.

In the 2002 Farm Bill, Congress required the dairy promotion checkoff program to be applied to imported dairy products. However, because of technical objections to the structure of the program, this provision was not implemented. The technical fix we are urging be included in the Senate version of the Farm Bill is a provision that was proposed by then-Agriculture Secretary Johanns in USDA's farm bill proposal. This correction would extend the dairy promotion checkoff to the small fraction of U.S. producers not currently covered, which represent only 0.44% of US milk production in 2006 - specifically those in Alaska, Hawaii and Puerto Rico. Once this technical adjustment to the program is made, the U.S. can level the playing field for the vast majority of dairy farmers and begin applying the assessment to imported dairy products, as Congress sought to do five years ago.

As you are no doubt aware, dairy imports are a significant and growing share of the U.S. marketplace. From 1989 to 2006, worldwide imports of dairy products into the U.S. increased in value from $830.3 million to $2.335 billion.

The promotion assessment on imports is important in terms of fairness for U.S. producers and the additional contribution it would make to the dairy promotion checkoff program. However, it is truly a modest amount - estimated to be less than $11 million annually - compared to the $2.335 billion importers are selling to U.S. consumers.

Again, we strongly urge you to include the technical fix to the dairy checkoff program in the 2007 Farm Bill so that importers of dairy products can begin paying their fair share of the cost of encouraging overall demand for dairy products within the U.S. market. The thousands of dairy producers operating across our states deserve nothing less.

Sincerely,


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