Sunday, December 10, 2006

The Price Some Pay for Dairy

Gotta love the violation of subsidiarity that so often occurs in the US "free market."

Just ask Hein Hettinga. He'll tell you what happens when you save customers $.20 a gallon on milk. The Dairy industry plays Gangsta' with the help of Congress--all on our tab!

The WP has the sad details:

In the summer of 2003, shoppers in Southern California began getting a break on the price of milk.

A maverick dairyman named Hein Hettinga started bottling his own milk and selling it for as much as 20 cents a gallon less than the competition, exercising his right to work outside the rigid system that has controlled U.S. milk production for almost 70 years. Soon the effects were rippling through the state, helping to hold down retail prices at supermarkets and warehouse stores.

That was when a coalition of giant milk companies and dairies, along with their congressional allies, decided to crush Hettinga's initiative. For three years, the milk lobby spent millions of dollars on lobbying and campaign contributions and made deals with lawmakers, including incoming Senate Majority Leader Harry M. Reid (D-Nev.).

Last March, Congress passed a law reshaping the Western milk market and essentially ending Hettinga's experiment -- all without a single congressional hearing.

"They wanted to make sure there would be no more Heins," said Mary Keough Ledman, a dairy economist who observed the battle.

Hettinga, who ran a big business and was no political innocent, fought back with his own lobbyists and alliances with lawmakers. But he found he was no match for the dairy lobby.

"I had an awakening," the 64-year-old Dutch-born dairyman said. "It's not totally free enterprise in the United States."

Most U.S. dairy farmers work within a government system set up in the 1930s to give thousands of small dairies a guaranteed market for their milk and to even out prices for consumers. Farmers who participate in regional pools operated by the federal government or the states deliver raw milk to cooperatives or food processors. They get a guaranteed price, whether the milk ends up in a gallon jug, cheese, butter or ice cream. In Arizona and other federally regulated regions, the Agriculture Department uses a formula to set the price processors pay for raw milk, issuing "milk marketing orders."

Developed for a bygone era of small dairies and decentralized milk plants, the system lives on when 3,000-cow dairies are not uncommon and huge cooperatives and food companies dominate the business.

Business groups, fiscal conservatives and some dairy organizations have called for Congress to overhaul the complex system of protections and subsidies, which they say is costly to taxpayers and consumers. A recent USDA study acknowledged that "dairy programs raise the retail price" of milk. The watchdog group Citizens Against Government Waste estimates that the programs cost U.S. consumers at least $1.5 billion a year.

Ridiculous! Deplorable! But oh, so Reasonable!

Can't have small operators bucking the Big Boys of dairy production, after all. What would that do to the Nanny State protocols that establish that racket? Gasp! The next thing you know, people might expect producers to actually compete--and offer fairer prices! Heaven forbid!

No, the Reasonable have spoken. The Government must set up the correct, regional prices so that all consumers within that region get hosed equally! Because only when the State governs the pocket-book can the truly enlightened lead Society. Everyone can live their absolute Individualism, as long as the chosen few control the purse-strings.

This story illustrates why Catholic Social Teaching includes subsidiarity and relative use (stewardship) of property. People make the best decisions on the use of their property when they're closest to the situation in which their property is involved. Consumers have better choices when competitors reduce prices to woo them. Unfortunately, in this case and far too many others, New Deal policy hang-ups allow big industries like Dairy to operate government-sponsered and sheltered cartels!

Longer this goes on, the more we all pay!

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