Gray Tells Eastern Milk Cooperative Be Glad For DEIP
VERNON ACHENBACH JR.
Lancaster Farming Staff
HERSHEY (Dauphin
Co.) The outlook for domestic
dairy production for cooperative
members is good for the short
term, but there are some potential
problems of which dairy farmers
should be aware, according to
Robert J. Gray, executive director
of the Council of Northeast Farmer
Cooperatives, Washington, D.C.
Gray was guest speaker Sunday
during the rescheduled annual del
egate meeting and annual conven
tion of the Eastern Milk Producers
Cooperative, held at the Hershey
Lodge and Convention Center.
It was the first time the coopera
tive, based out of Syracuse, N.Y.,
held its annual meeting in Her
shey. It was only the third time, in
the co-op’s 70 years that the meet
ing was held in Pennsylvania.
A high percentage of the
expected 200 delegates attended
the function which had been sche
duled for March 16, but was post
poned because of the Blizzard of
’93.
Dick Norton, general manager
of the Middle Atlantic Milk Mark
eting Area (MAMMA) dairy
promotion agency, was the sche
duled luncheon guest speaker, but
failed to appear.
Scheduled to speak earlier in the
day, Robert J. Gray, who works
out of Washington, D.C.,
addressed the afternoon group.
Gray discussed the way
Washington, under the forming
Clinton administration, is appa
rently starting to look at agricul
ture, in terms of cutting back ser
vices, increasing programs for
export, and in fighting the national
deficit.
Gray presented mostly a posi
tive outlook for the immediate
future, but said that there is a lot of
uncertainty with the future, includ
ing the new U.S. Department of
Agriculture.
USDA Appointees
Need Confirmation
Mostly, the uncertainty is that,
while about 75 percent of the polit
ical appointees have been named,
most are yet to be confirmed and
therefore lack the authority to
make progress under currently
operating programs, he said.
He said it means that, until some
people get Senate confirmation,
there will be no action to imple
ment changes, such as those antici
pated with federal order pricing
structures.
Gray said that producers should
be pleased that the dairy assess
ment program created under the
Omnibus Budget Reconciliation
Act is not projected to increase for
the next several years.
However, he did warn that there
are some in Congress and
Washington who are discussing
boosting the dairy producer’s
assessment in 1996 from the cur
rent 11.25 cents to 18 cents per
hundredweight.
He said that currently $146 mil
lion is raised through the assess
ment program.
Gray said that while the dairy
industry may have gotten off ini
tially unscathed by the change in
power and people, other industries
of U.S. agriculture have been hit
hard in proposals for reductions in
federal spending.
He said that target price support
commodity programs, such as for
grains, have seen a significant
reduction in acreage eligibility for
deficiency programs. Gray said
circulating proposals include a lot
of changes that farmers don’t like.
He said that there is also some
pressure from some Midwest and
Southern representatives to lighten
the cuts, because of a feeling that
they are getting hit too hard.
On the administration’s eco
nomic stimulus package. Gray said
that there are “a few things okay
for agriculture.”
Economic Stimulus
He said that while the stimulus
package was trimmed down from
the initially estimated $3O to $4O
billion, there is projected to be
about S7S million going to
Women, Infants and Children
(WIC) programs for food subsi
dies. He said there is also another
$BB billion total targeted for the
emergency food program and
another public food-welfare
programs.
“It could be of benefit for the
dairy industry,” Gray said,
explaining that all these public
nutrition programs incorporate
dairy products.
Also, Gray praised an invest
ment tax credit program which is
to go into effect for projects done
in 1993, and for which fanners are
eligible.
The credit program is to start off
with providing a 5-percent credit
and then is to continue on a perma
nent 5-percent basis.
He said there is also to be an
extension of a previous health
program deduction of 25 percent.
Gray said he is keeping close
track on what the health program
proposals are going to be. A
deduction on heallh insurance pre
miums is proposed, but Gray said
he wasn’t sure how it would affect
the self-employed.
As far as work for re
organization of the USDA, the
proposal is to condense the Agri
cultural Stabilization and Conser
vation Service with the Soil Con
servation Service and the Farm
Home Administration to form one
agency called the Farm Service
Agency.
Consideration for including
extension services from land-grant
universities into the one-agency
program was apparently dropped.
Gray said that while he applauds
consideration for increasing effi
ciency and lowering costs of
USDA operation, people should be
careful so as to not bog down the
USDA with re-organization man
dates which would prevent the
agency missions from being
completed.
“Back in 1976-77, when Carter
came in, they were going to re
organize USDA. They spent two
years trying to re-organize and
never got anywhere.”
Gray said that he was “all for
cutting down on plush jobs and the
number of assistants” on the
USDA payroll.
“We can do some things to
streamline, but when it gets to
infighting among the different
agencies, it is wasted energy,” he
said, because everybody spends
time on inter-office subterfuge and
not on completing service work.
FDA Sets BST Hearing
In other news, Gray said that a
public hearing on BST is set for
8:30 a.m. to 5 p.m., March 31, at
the Holiday Inn, in Gaithersburg,
Md. The hearing is being held by
the Veterinary Medical Advisory
Committee of the Food and Drug
Administration, and may be the
final hearing before FDA gives
approval.
This controversial hormone has
undergone several years of review
by the Food and Drug Administra
tion without being rejected on any
scientific basis. However, some
have objected to adopting the tech
nology for personal, ethical, or
economic protection reasons.
BST is a hormone produced by
the cow which serves to direct
nutrients to the mammaries for the
production of milk.
The hormone is artificially pro
duced in the same way that insulin
is currently produced, using genet
ically altered bacteria. Some prop
osed applications of the product
would be to inject the hormone
into a lactating cow. The result has
been an average increase in milk
production by 10 or more pounds.
On a percentage basis, the
amount of extra milk produced
varies with each cow, according to
how much milk that individual
cow produced previous to BST
therapy.
Since BST is in all milk, and
because levels do not discemably
increase, there are no tests which
can detect the difference between
milk produced with BST and milk
produced otherwise.
According to Gray, within 60
days after the public hearing, BST
could possibly be approved for
use. That would mean, that by
August, it is possible that dairy
men may begin using BST
commercially.
The public hearing is to address
an abstract, cause-and-cffect con
nection between the use of the hor
mone and public health.
The concern is that because
there has been shown to be statisti
cal increase in mastitis among
cows treated with BST, and since
cows are treated with antibiotics to
combat infections milk will
show up in the market place with
antibiotics and thereby posing a
threat to public health.
The concern, raised by the for
mal administration’s investigative
agency, the General Accounting
Office (GAO), apparently assumes
that current milk testing-rejection
programs are ineffectual for anti
biotics. It must also assume that
farmers somehow would become
more incapable of keeping milk
from antibiotic-treated cows from
going into a milk tank.
Although Gray didn’t specifi
cally address other ramifications
of the FDA approval process, the
issue does have potential to affect
other areas of concern.
Ag Cuts
SIOUX FALLS, S.D. Major
agricultural budget cuts were post
poned until '996 in order to give
time to consider changes needed
in the 1995 farm bill, President
Bill Clinton announced in a video
taped message to the National Far
mers Union Convention.
President Clinton told NFU
convention delegates that agricul
ture would be asked to participate
in the nation’s deficit reduction
efforts. However, he noted that
agriculture had already exper
ienced signficianl budget outs in
the last budget compromise.
He said his economic package
purposely postponed the major
agricultural cuts to give time for
his administration to put their
stamp on agricultural and rural
policies.
Clinton indicated his admi
nistration would be willing to con
sider how the proposed budget
cuts would be carried out. He said
he wanted to hold off on major
Negotiations with Mexico on
the North American Free Trade
Agreement are hinging on two
major issues, both of which narrow
down to one thing production
limitations.
Specifically, BST has been legal
in Mexico for at least a year.
While there have been no
reports of concern about Mexico
using BST, that fact has the poten
tial to be a cause of controversy in
the NAFTA negotiations.
Gray said he thinks BST will
probably be approved for use in the
United States, but that presents
some challenges, mostly public
relations, to the entire dairy
industry.
In addition to some farmer
objections to its use, there are
domestic animal rights groups and
various family-farmer
protectionist groups and
individuals some extremist,
others respected by mainline
producers which have decried
the use of BST and similar
technology.
More than BST, it is these mis
leading, fear-spreading opposition
groups and the resultant consumer
reaction which should be of con
cern to the industry, according to
Gray.
He said that already there is
some talk in the U.S. Congress
about introducing legislation
which would delay release of BST
onto the market.
Of the tacts under consideration
by some congressmen is a plan to
introduce legislation which would
delay domestic approval of BST
until the Eastern European Com
munity has done so, Gray said.
Another would be to require that
the current U.S. manufacturers of
the product be made to set up an
indemnification program such
as posting a bond to pay far
mers for loss of cattle, if any, due
directly to use of BST.
However, Gray said that these
measures should be seen as mere
stalling tactics.
To combat the potential nega
tive effect of the controversy on
the entire dairy industry, Gray
said, “We must come up with
strategies and policy.”
In other areas of concern, Gray
said the pending NAFTA is far
Will Be Determined
Through Farm Bill
agricultural cuts until after his
administration is able to work out
the 1995 farm law to belter serve
the needs of family farmers.
He told the convention that his
plans for the national economy
won’t happen until rural America
prospers again. He also promised
that he would put family farm
agriculture in the forefront of his
plans for rebuilding the nation.
He reviewed his proposals to
audit every federal program to
achieve the necessary savings for
deficit reductions. “We will not
HCMH Of
from a sure thing, but that it would
be good for the U.S. dairy industry.
According to Gray, the demand
for currently available dairy pro
ducts in Mexico is greater than the
supply, furthermore, the agree
ment would allow duty-free intro
duction of additional types of U.S.
dairy products into Mexico.
However, Gray said opposition
is growing because of two major
concerns labor and
environment.
Concerns are that creating a
free-trade zone would benefit
those trading partners who deny
workers the same benefits as
American counterparts, thus mak
ing it cheaper to produce where
labor is rewarded less.
A smiliar argument also is held
by some for environmental
concerns that those who spend
nothing for long term environmen
tal protection will reap the biggest
monetary gain, though short term,
on such a free-trade pact.
Gray said that there are also
those who oppose NAFTA
because they oppose free trade,
and believe in a protectionist eco
nomic philosophy.
“If NAFTA were up today (for a
vote before Congress), it would be
tough to pass. In a few months,
when they work out the side agree
ments, it is still going to take some
work.”
In other aspects of trade, the
dairy industry benefitted from the
Dairy Export Incentive Program
(DEIP), Gray said.
Export of dairy products seemed
to take off with sales to the former
Soviet Bloc countries, under
DEIP, Gray said. That means
DEIP is helping to keep on-farm
prices higher, because demand is
increased.
On the other hand, there is cur
rently a 10-metric ton milk powder
shipment going overseas which
was provided by 12 regional
cooperatives.
“In addition to the humanitarian
aid, they’re looking at the potential
trade and trade in general” in pro
viding the food and sending rep
resentatives over, Gray said.
The cooperatives were praised
by Gray for taking an initiative in
looking to see where they can help
themselves develop trade
agreements.
raise taxes, until we can get these
savings from our budget,” he said.
He affirmed his commitment to
carry out major rural development
programs and improving rural
infrastructures, including roads,
bridges, and water and sewer
systems.
Clinton expressed appreciation
to the farm organization. “The
National Farmers Union was the
only major farm organization to
endorse our program for change.
Together we will make that
change happen for America,” he
said