A22-Lancaster Farming, Saturday, November 7, 1992
Milk Programs Debated
(Continued from Page At
farmers and efficient processing
and distribution systems have
developed over the past 60 years
since the start of administered pric
ing. Consumers have received an
adequate supply of milk and dairy
products at reasonable prices,”
Hand said.
But Vaughn took exception to
the notion that these programs have
been good for dairy farmers.
‘The system is complex and is
influenced by political policies,”
Vaughn said. “While the price sup
port programs and the federal milk
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marketing orders are separate
programs, they interrelate, and a
cause and effect relationship
exists.
The support program is set up
fra* the government to purchase dry
milk, butter and cheese excess
when there is an excess. A price is
established for all these products.
The products that are stored by
the government can be purchased
at 110 percent of the support price.
But because of the USDA stocks,
the market prices are restrained to
the 110 percent support price.
While the producer benefits for this
program clearing the market, the
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consumer benefits from available
stocks capped in pice.
In addition, the manufacturer is
not required to pay support price
for raw milk while selling products
to the government The manufac
turer will react to the amount of
available milk. This has an adverse
effect on the price of fluid milk.
“Producers in the Middle Atlan
tic are affected by the weather, sup
port prices and demand for manu
facturing milk in the Upper Mid-
West while most if not all of the
economic factors of the region are
ignored,” Vaughn said.
Dr. Wayne Rasmussen, retired
USDA economist and historian,
gave a historical view of agricul
tural subsidies. “Sixty years ago
the government said to farmers,
At the Philadelphia Society for Promoting Agriculture monthly meeting are from
left, Dr. Thomas Glnley, MC; Beverly Murphy, Dr. Stuart Younkln, and Richard Way
bright, all recipients of the service to agriculture award, and Dr. Eldrow Reeve,
president.
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‘Restrict production and we will
pay you a fair price,*” Rasmussen
said. “At the time they called it a
temporary method for pricing. But
SO years later this method of deal
ing with a temporary emergency is
still in effect”
Dr. Robert Yonkers, Ag Eco
nomics Dept., Penn State Universi
ty, was the moderator. In opening
remarks; Yonkers said the dairy
industry in Pennsylvania is a $1.5
billion industry, making us the
fourth largest dairy state in the
nation. He said these figures did
not include the $250 million from
sale of beef, cull dairy cows and
veal calves. And it did not include
figures for processing and the val
ue added there.
“There is no such thing as a free
Special
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market without any government
involvement,” Yonkers said.
“Marketing requires government
to set the rules for property rights
and allows people with resources
to use them in markets. Govern
ment facilitates the exchange of
commodities and services in mark
ets, by providing legal tender and
by arranging for basic rules which
allows markets to operate.”
In a speical recognition lunc
heon, three members of the society
were honored for their service to
agriculture. They are Beverly Mur
phy, Dr. Stuart Younkin, and
Richard WaybrighL The society
was founded in 1785 and has been
a major support for agriculture
over the years.
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