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Fear Supply Controls Could Raise Dairy Product Prices

20 October 2011

US - The Consumer Federation of America, representing more than 300 non-profit consumer organizations, sent a letter on Monday to congressional agriculture leaders and members of the Joint Committee on Deficit Reduction, urging them to avoid any options that would increase milk costs for consumers.

CFA voiced concerns about the effects of the Dairy Market Stabilization Programme included in Representative Collin Peterson's (D-MN) legislation, H.R. 3062, which would mandate federal milk-supply control.

“The Dairy Market Stabilisation Programme, included in H.R. 3062, is specifically designed to increase milk prices,” CFA said in the letter. “This means that consumers would pay higher prices for milk and milk products than they otherwise would.”

CFA also said that any increase in milk costs would hit low-income consumers the hardest, because they would be forced to spend a higher percentage of income on food. The additional costs could strain the federal budget as well with increases to the costs of the Supplemental Nutrition Assistance Programme (SNAP), the National School Lunch Programme and the Special Supplemental Nutrition Programme for Women, Infants and Children (WIC).

CFA expressed additional concern that supply-control programmes could have a negative impact on consumer nutrition. Referencing studies showing that that milk consumption declines as prices rise, CFA added: “Federal nutrition guidelines encourage increased calcium consumption and milk is a primary way that consumers obtain calcium in their diets.”

The consumer groups join IDFA and other organisations in their call for omitting government-mandated supply-control programmes from the budget package proposals.

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