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Published May 24, 2009, 12:00 AM

Dairy export subsidies help Minnesota farmers

U.S. actions to bolster sagging export markets for dairy products should help Minnesota dairy farmers, Minnesota lawmakers say.

By: Brad Swenson, Bemidji Pioneer

U.S. actions to bolster sagging export markets for dairy products should help Minnesota dairy farmers, Minnesota lawmakers say.

U.S. Agriculture Secretary Tom Vilsack announced Friday he would enable a program to purchase dairy products from the market and provide them to food shelf programs in order to stabilize prices and boost domestic demand.

The Dairy Export Incentive Program helps U.S. dairy exporters meet prevailing world prices and encourages the development of international export markets in areas where U.S. dairy products are not competitive due to subsidized dairy products from other countries, the U.S. Department of Agriculture said.

“These allocations illustrate our continued support for the U.S. dairy industry, which has seen its international market shares erode, in part, due to the reintroduction of direct export subsidies by the European Union earlier this year,” said Vilsack.

“The Obama administration remains strongly committed to the pledge by the leaders of the Group of 20 to refrain from protectionist measures,” he said. “Our measured response is fully consistent with our WTO (World Trade Organization) commitments and we will make every attempt to minimize the impact on non-subsidizing foreign suppliers.”

The DEIP allocations of 68,201 metric tons of non-fat dry milk; 21,097 metric tons of butterfat; 3,030 metric tons of various cheeses and 34 metric tons of other dairy products, as well as individual product and country allocations will be made available through Invitations for Offers. Country and region quantities may be limited by the invitation, Vilsack said.

“I want to thank USDA Secretary Vilsack for supporting U.S. dairy farmers by using the Dairy Export Incentive Program,” said U.S. Rep. Collin Peterson, DFL-7th District, chairman of the U.S. House Agriculture Department. “Dairy farmers across the country are struggling to survive because of low prices and too much product on the market, and DEIP is an important tool that we can use to manage surplus and support producers.”

The program was authorized under the 2008 Farm Bill.

“I have encouraged Secretary Vilsack to take these steps to help dairy farmers, and I am pleased that we are able to announce the DEIP purchases,” Peterson said.

Peterson and a bipartisan group of members on the House Agriculture Committee wrote to encourage Vilsack to use DEIP and other programs to help struggling dairy farmers. Peterson also discussed the issue during regular conversations with Vilsack.

Also writing to Vilsack was U.S. Sen. Amy Klobuchar, DFL-Minn., a member of the U.S. Senate Agriculture Committee.

“We’ve provided immediate and targeted support to stabilize prices domestically, now we need to ensure a level playing field for our dairy farmers as they continue to deal with international market forces that are beyond their control,” said Klobuchar. “Farmers are especially vulnerable during these tough economic times and Secretary Vilsack’s actions will help protect our family farmers.”

In the past few weeks, Klobuchar has been in contact with the Office of the U.S. Trade Representative concerning dairy farmers’ situation. They build on steps Klobuchar announced in March.

The newly enacted program allows allocations under USDA’s DEIP for the July 2008 through June 30, 2009, period, as allowed under the rules of the World Trade Organization. The program is designed to help dairy exporters compete with world prices while encouraging competition in international markets in which dairy prices are kept artificially low through subsidies.

In February, Klobuchar joined with Democratic Sens. Herb Kohl and Russ Feingold of Wisconsin and other senators to send a letter to Vilsack asking him to take action to help stabilize prices and protect Minnesota’s farmers from the rapidly declining milk prices. Klobuchar also met with nearly 75 dairy farmers in Mora, Minn., in late February to hear about the impact of declining dairy prices.

In March, at a White House Middle-Class Task Force meeting in St. Cloud, Klobuchar urged the Agriculture secretary to provide help to Minnesota dairy farmers as soon as possible. Shortly after the meeting, Klobuchar announced that the USDA would create a program to purchase dairy products from the market and provide them to food shelf programs in order to stabilize prices and boost demand.

bswenson@bemidjipioneer.com

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