Grange Opposes Pooling Proposal
STATE COLLEGE (Centre Co.)
The Pennsylvania State Grange
presented testimony here this week
before the House and Senate Agricul
ture Committees at a special hearing
convened to hear both sides of a pro
posal by the Pennsylvania Milk Mar
keting Board to pool the over-order
premiums paid to dairy farmers for
fluid milk produced, processed, and
sold in the state.
Brenda Shambaugh, Pennsylvania
State Grange legislative director,
opened testimony on behalf of the
Grange. The Grange has always been
opposed to premium pooling.
“We have had experts come to
meet with our agriculture committee
and dairy sub-committee several
times since the pooling issue has sur
faced,” Shambaugh said. “Every
time the issue is discussed, (Grange)
policy is re-evaluated and has re
mained the same.”
Shambaugh said that the Grange
agriculture committee stated in their
2001 committee report, “The Grange
reaffirms our policy in opposition of
pooling the over-order premium.
“The Grange strongly believes that
pooling will be detrimental to most
dairy farmers across the state,”
Shambaugh said. She testified to two
specific reasons for the Grange’s op
position to pooling.
“Competition in milk markets can
mean extra dollars in a dairy farm-
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er’s pocket,” Shambaugh said. “Pro
cessors need to satisfy their produc
ers to maintain their market, so they
have to pay what the market will
bear. Pooling means that everyone
receives the same amount of the pre
mium. In essence, that means compe
tition is compromised.”
Tied to competition, she said, is
the fact that “pooling the over-order
premium dilutes the premium to an
almost insignificant amount. Farm
ers who currently receive a large por
tion of the premium will have their
milk checks reduced substantially.
But those dairy producers who will
receive more of the premium than
before pooling will not significantly
increase their milk check. They will
receive a small amount of the premi
um because it will be sent to all dairy
producers. So those farmers will lose
their competitive edge.”
Charles E. Wismer Jr., a dairy
farmer from Montgomery County
and a past president of the Pennsyl
vania State Grange, testified that
“more than half of the dairy produc
ers across the state will lose money if
45 percent of the over-order premi
um is pooled.”
Wismer also linked the over-order
premium to competition.
“I am willing to take less directly
from the over-order premium be
cause I believe that I will lose more
indirectly if the money is pooled.
Competition is part of business. Pool
ing takes away competition”
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Wismer testified that he has a con
cern for where the pooled money
from the over-order premium would
go. He said “The money will be sent
to the co-op from the Pennsylvania
Milk Marketing Board. There is no
law or regulation mandating that the
funds be passed on to the producer.
The co-op could keep the pooled
money and use it to build a new
plant or send it to a farmer in anoth
er state.”
Charlie Seidel, a Berks County
dairy farmer also testified on behalf
of the Grange against the proposed
pooling regulations. He opened with
the statement, “Pooling will have a
significant negative impact on my
dairy operation.
“Because my milk is produced,
processed, and sold in Pennsylvania,
I receive the Pennsylvania Milk Mar
keting Board over-order premium,”
Seidel said. “Last month I received
slightly over 75 percent of the premi
um, or $1.13 per hundredweight. The
premium amount of my milk check
last month was approximately $9OO.
If the proposed regulations were im
plemented, I would have received
only 80 cents per hundredweight,
which would have decreased my pay
check by over $250.
“The Pennsylvania State Grange
and I strongly urge the House and
Senate Agriculture Committees to re
quest that the Pennsylvania Milk
Marketing Board withdraw their
proposed pooling regulations,” Seidel
said.
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(Continued from Page Al 6)
proceeds from special exports
with the Canadian domestic price
to individual Canadian produc
ers. This could provide an incen
tive to expand beyond the highly
restrictive Canadian quota sys
tem for those producers. Second,
U.S. dairy farmers would face
lower prices here in the U.S. as
imported raw milk from Canada
displaces domestic milk.
The last speaker was Rick
Phillips with Dairy Farmers of
Canada. He did a good job pres
enting the Canadian perspective.
He defended the Canadian sys
tem of rigid quotas and high in
ternal domestic prices. Basically,
Canadian farm prices are higher
and more stable than those in the
U.S. Canadian dairy farmers I
spoke with said the price is high
enough that they can afford to
purchase and finance quota along
with normal production ex
penses.
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The best part of the program
was speaking with the Canadian
dairy farmers after the meeting.
The dairy farmers in Alberta are
very sharp and open to discus
sion of different ideas. While they
respectively disagreed with the
U.S. and New Zealand policy
and some of the WTO proposals,
they were open to different ideas.
It was clear from my perspec
tive that Canada would not bene
fit from any of the proposals for
trade reform that are being dis
cussed at the WTO meetings. My
assessment is that Canada will
pursue a strategy of defending
their quota system. They will
likely try to reserve a special sta
tus during the WTO negotiations
for those countries that manage a
quota system. For example, they
could agree to live within the
confines of their restrictive quota
policy and face limited increases
in imports, but only if they agree
to forgo export subsidies and ac
cess to global markets.
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