CCAGW Blasts Milk Subsidy Maneuver

Washington, D.C. - The Council for Citizens Against Government Waste (CCAGW) today blasted a proposal to extend the Milk Income Loss Contract (MILC) program.  The amendment, proposed by Rep. David Obey (D-Wis.) to the FY 2007 Agriculture Appropriations Act (H.R. 5384), could cost $3.9 billion over ten years.  

“The MILC program is unnecessary and counterproductive,” CCAGW President Tom Schatz said.  “There is no justification for extending it.”

The MILC program, created as part of the 2002 farm bill, is scheduled to expire in September 2007.  Rep. Obey’s amendment would extend the program for another month, effectively locking it in to the baseline for the 2007 farm bill.

The dairy industry is already subsidized through the Dairy Price Support Program (DPSP), which cost taxpayers an average of $500 million per year from fiscal 1999 to fiscal 2004 for the purchase of surplus dairy products. 

The MILC program subsidizes dairy farmer income through production-linked payments, which leads to expanded production and lower milk prices.  Then, the DPSP purchases the surplus milk production caused by the MILC program.  The Congressional Budget Office estimated that MILC would cost $1.3 billion over four years.  However, the program cost more than $2 billion during that period of time.  Over the objection of groups such as CCAGW, Congress already extended the MILC program to September 2007 in the 2006 Budget Reconciliation Act.

In a letter to the House of Representatives, CCAGW President Tom Schatz urged members to reject the Obey amendment, adding that all votes on the MILC program will be among those considered for inclusion in CCAGW’s 2006 Congressional Ratings.

The Council for Citizens Against Government Waste is the lobbying arm of Citizens Against Government Waste, a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.

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