19 September 2009

Senatorial Stumbles

(via JF) US Senators are calling for more price supports to help "struggling" dairy farmers.

That's because dairy prices have dropped by more than input prices, and their profit margins are being squeezed.

This is a stupid idea -- mostly because the current system of regulations and price supports is meant to prevent just such an occurrence. The reason that dairy farmers are in trouble is because of government policy, not for lack of such policy. (Oh, and those policies are also responsible for the groundwater pollution that HUGE dairies produce...)

Their current attempts to help are shallow offers to add more complexity to the Rube Goldberg dairy program that the USDA currently manages for the benefit of farmers bureaucrats.

Bottom Line: The best way to help dairy farmers is by getting the government out of the dairy business. Those who can, will prosper; those who cannot will get off the teat and go into another business (of bribing senators, no doubt).

1 comment:

Mister Kurtz said...

The dairy policy is insane. It comes from a philosophy that is fine for a five year old's birthday party, but not for grownups: "Every child gets a chance to ride the pony." The game is rigged so that there are no losers, and guess what: too much milk! What's worse, it has encouraged the production solely of fluid milk, and revolting rat-trap cheese, instead of innovative and wholesome products. For a while, the excess milk was made into powder and dumped on the world market, but the recession has stifled demand.
This policy has gone on for generations. Remember Henry Wallace's "Just a little milk for the Hottentots" plea, which term became slang for foreign aid for many years.