A2B-Lanca*tw Farming, Saturday, Auguat 19,1989
ROCK SPRINGS (Centre
Co.) —Several hundred members
of Dairy of Distinction farm fami
lies from across Pennsylvania
gathered in the special events
building here Wednesday for the
annual fraternal “get-together” of
the winners in the farm beautifica
tion program. The formal meeting
was short with a few comments
from PSU’s Dean Lamartine
Hood; Paul Corbin, president, Pen
nsylvania Dairy Promotion Prog
ram and Dan Baker, director,
American Dairy Assn., Dairy
Council. Corbin and Baker
received plaques and certificates
for the finincial support their orga
nizations have provided for the
program since it began in Pennsyl
vania three years ago.
As in the past two years, the
Pennsylvania group selected a per
son who made extensive contribu
tions in personal time and effort to
the program. This year, Naomi
Spahr was named Person of Dis
tinction for her efforts to get the
BY KARL BERGER
Special Correspondent
The Bush administration’s con
tinuing commitment to freer world
trade in agriculture could have sig
nificant consequences for the U.S.
dairy industry. The question is
whether those changes would help
or hinder domestic dairy fanners.
Secretary of Agriculture Clay
ton Yeutter, continuing policies
begun when he was the U.S. Trade
Representative in the Reagan
administration, has been extolling
the benefits that U.S. farmers,
including dairymen, would gamer
in a global marketplace with less
trade barriers.
In recent testimony before Con
gress, Yeutter said current dairy
policies have restricted both
imports and exports to the detri
ment of U.S. producers. More
market-oriented policies would
boost dairy farm income, he said.
Others disagree, however,
including the influential National
Milk Producers Federation, a lob
bying group that represents dairy
cooperatives in Washington. The
federation would like to see dairy
policies excluded from future trade
negotiations.
The Bush administration is like
ly to continue to pursue its free
market in agriculture approach—
U.S. government officials have
A group portrait of the Dairy of
Dairy Of Distinction Holds Fraternal Meeting
program started and her work as
the first treasurer in Pennsylvania.
Last year, Naomi and her husband
Robert sold the cows from their
farm at Lititz, (Lancaster Co.) so
she resigned from her state office.
The participants in the gathering
spent time getting to know other
farm families and saw the display
of color portraits of the winning
farms. These photographs are
taken by the local district commit
tees and Lancaster Fanning pro
vides each winner with a mounted
color enlargement.
As pan of the fraternal spirit, the
group signed a “thinking of you”"
card in support of a fellow Dairy of
Distinction farm family. The
Roger Campbell family won the
award last year and had within the
week been notified that a number
of cows in their prize Guernsey
herd had been disagnosed With
bovine TB.
One of the winners who thanked
the people involved with this farm
Free Trade In Ag
proposed the ultimate elimination
of all forms of trade barriers and of
price-distorting government
subsidies—in the current Uruguay
round of the General Agreement
on Tariffs and Trade (GATT).
During the latest round of these
multilateral trade talks, in Geneva
this past spring, negotiators agreed
to a framework for reducing ag
trade barriers in the future and a
pledge to not increase such barriers
in the meantime.
This so-called “Dunkel agree
ment” commits the GATT coun
tries to “substantial progressive
reductions in agricultural support
and protection.” More specific
proposals are due in December and
serious negotiations are expected
to lead to some kind Of agreement
by the end of 1990, according to
Peter Vitalliano, a federation eco
nomist who has closely observed
the GATT process.
Federation concerns are focused
on the possibility that the current
system of “Section 22” import
quotas on foreign dairy products
would be weakened or eliminated
by the GATT negotiations.
In recent testimony before the
International Trade Commission,
Jim Barr, the federation’s chief
executive officer, said that studies
of the issue “conclude that, for vir
tually any scenario under which
Section 22 limitations are modi
ttlnctlon farm families present at Ag Progress bays. Photo by Evoratt Nowmwngor.
beautification program said that noticed that since they received the to keep the place looking a little
his sons now run the farm but he award, the boys were encouraged better.
Raises Questions For Dairymen
fied or removed, the U.S. dairy
industry would suffer severe price
erosion, driving thousands of U.S.
dairy farmers out of business.”
Section 22 refers to the Agricul
tural Adjustment Act of 1933.
Under it, most foreign dairy pro
ducts are denied access to the U.S.
market or given only special, lim
ited access through a quota.
For instance, most countries
cannot export butter to the United
States, and those that can are lim
ited in the amount. New Zealand
can export no more than 300,000
pounds annually, for example.
There are no barriers for some pro
ducts, such as certain cheeses and
casein, a milk protein.
The quotas have served to limit
the disruption of domestic markets
at times, as was true of much of the
past 20 years, when U.s. prices
were well above world marketp
lace prices. Under this system, tot
al dairy imports have averaged no
more than 1 to 2 percent erf U.S.
production during the 1970 s and
1980 s, according to Andrew
Novakovic, a Cornell University
economist
In the last few years, however,
the combination of lower U.S.
prices and higher world prices
have opened up export opportuni
ties for some products, notably
non-fat dry milk, and the value of
dairy expats has outstripped the
value of imports, hi the fiscal year
that ended September 30,1987, for
example, the U.S. Department of
Agriculture estimates exports at
$495 million and imports at $461
million.
Although U.S. butter is occa
sionally exported, this market is
not viewed as promising. Butter
sales, such as die recent one of
75,000 metric ton* to the Soviet
Union, have been made by the
Commodity Credit Corporation at
subsidized prices. Many observers
regard the export market for
cheese as only marginally better.
The pro-trade argument is that
the pins shown by U.S. exports of
non-fat dry milk can be expanded
and extended to other products if
world trade barriers are reduced
and if the federal government con
tinues to reduce its price support
levels. In essence, it is the same
argument that Reagan and now
Bush administration officials have
made for other sectors of agricul
ture, particularly grain. '
Skeptics, however, question
whether the GATT process really
can lead to lowered trade barriers
for dairy products.
"The big battle is between the
United States, with its export
oriented market, and the European
(Economic) Community, with its
internally isolated markets," Vital-
liano said.
Since the development of the
post-war economic order, the
countries of western Europe have
maintained variable import levies
to protect their heavily subsidized
domestic markets for dairy pro
ducts. Although these countries
have made a few concessions
recently, they are unlikely to aban
don their overall philosophy,
according to Vitalliano.
“We just don’t think the Euro
peans are going to make funda
mental changes.” he said. Federa
tion officials, he added, are wor
ried about “unilateral
disarmament,” the possibility that
the United States will trade away
its import quotas without the Euro
peans doing the same.
Both Yeutter and Bush have
said they will not agree to such an
outcome, but the suspicion persists
among some observers that admi
nistration officials regard U.S.
dairy quotas as a bargaining chip
that can be cashed in to achieve
agreements in other areas.
In the meantime, all Section 22
quotas, which cover other items in
addition to dairy products, are sub
ject to discussion when GATT’s
Geneva talks resume.
’’All of our quotas are on the
negotiating table in Geneva,
including dairy,” Yeutter said
recently.