December 4, 2007

Promotion fees may stir resentment in US dairy industry
 

A fight in US Congress over whether to assess fees on dairy imports to help pay for promoting dairy products is pitting dairy farmers against big-name US food companies.

The battle also extends to cheese importers, foreign countries - and even Alaska, Hawaii and Puerto Rico.

The Bush administration never implemented the dairy import assessment approved by Congress in 2002 because the Agriculture Department concluded the fees could create the appearance of favorable treatment. The fees on domestic producers are levied only on dairy farmers in the 48 contiguous United States.

This year, the chairman of the House Agriculture Committee, Rep. Collin Peterson, D-Minn., inserted into the 2007 farm bill language that would extend the mandatory fee to dairy farmers in Hawaii and Alaska (ranked 48th and 50th in dairy production, respectively) and Puerto Rico. That would remove the trade hurdle and pave the way for fees on imports, he argued.

The House of Representatives passed the farm bill in July, but it awaits action in the Senate.

US dairy percent2c+US) farmers pay 15 cents per 100 pounds of milk sold for the promotions. Cheese importers would pay around 1.5 cents a pound because it takes about 10 pounds of milk to make a pound of cheese. The promotions pay for things like the "3-A-Day" marketing campaign, which encourages people to consume three servings of milk, cheese or yogurt a day.

The Senate version of the farm bill does not include the dairy imports language and eight senators - including the four from Alaska and Hawaii - sent a letter to Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, urging rejection of the House language.