The New Federal Milk Marketing Program

Last January, officials in Washington announced a major plan to preserve one of the most successful economic programs in our nation’s history. Although the system was created more than 60 years ago (drawing charges from critics that it has outlived its usefulness), it has served the vital purpose of ensuring that certain vulnerable segments of our society have a fiscal safety net that ensures them some protections from the volatility of the marketplace. Everyone around the country agreed that some changes were needed, but questions arose about how to best preserve the crucial aspects of the program without ruining it in the process.

If anyone outside the dairy industry were to read the preceding paragraph, the reader would naturally leap to the assumption that I ‘m referring to the Social Security program, and efforts being discussed by the White House and Congress to reform it. But much of the same rhetoric that has been used by President Clinton and others to highlight the importance of saving Social Security could also be applied to the reform of the Federal Milk Marketing Order system.

Like Social Security, Federal Orders are a product of the Great Depression, when hard times spurred the creation of a variety of New Deal programs intended to help the hard-pressed. In the case of Social Security, those helped were the elderly. In the case of Federal Orders, the program helps dairy farmers, who often lack the clout to stabilize turbulent marketing conditions that put them at risk when they sell their product to dairy processors.

As is the case in the debate over what to do with Social Security, there have been voices that claim the Federal Order system is outmoded, doesn’t make sense for the future, and ought to be scrapped. But while these voices raise some relevant issues, they don’t represent the majority of those impacted by the program – using either example. Polls of the public show that a vast majority continues to believe that Social Security has been an enormous success, and they don’t want it done away with.

Similarly, I think the effort we’ve gone through in the past year to in Washington to revise the Federal Order program demonstrates that despite problems inherent in the system, history has clearly shown that it has offered – and will continue to provide – much more stable marketing conditions for producers than if there were no classified minimum prices for their milk.

Unlike Social Security, where reform is still up in the air and subject to a great deal more political wrangling, reform of the Federal Milk Marketing Order system is now a reality. Instructed three years ago by Congress to revamp the system, the USDA is moving forward with reform of Federal Orders as of January 1 – long before anything in the way of Social Security reform will develop.

I think making a comparison between these two programs is appropriate because with both Social Security and Federal Orders, we shouldn’t let perfect be the enemy of good, when it comes to making improvements in the programs. What I mean by that is simply that as we move forward with the changes developed by the USDA and Congress, we shouldn’t allow our desire for reasonable reforms be held hostage by those who say that unless the system is absolutely perfect, we shouldn’t even bother with it.

Too often, in Washington as well as other places, reasonable compromises get swept away by those who expect 100 % perfection. Since programs like Social Security and Federal Orders are created by humans, they’re going to have flaws in them. But we shouldn’t mistake flaws that we can live with, with flaws that are fatal.

After living 60 years with the Federal Order system, I hope that we can now constructively deal with a new and hopefully improved system that is vital to the future of the dairy industry. Perhaps those interested in reforming Social Security could learn a lesson or two from us in the process.

National Milk Producers Federation

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