As the nation recently veered toward the fiscal cliff, and critics warned of economic catastrophe if taxes increased or spending decreased, consumers were faced with another potential crisis: rising milk prices. According to business and political commentators, if Congress failed to pass an extension of dairy subsidies contained in the Farm Bill, milk prices could rise to as much as $7 a gallon. Congress avoided this problem by passing the bill and extending the dairy subsidies. However, that has not brought an end to the discussion, as the situation has led many Americans to question farm subsidies, especially in a time when the government is facing a shutdown due to disagreements on excessive spending.
The federal government has subsidized dairy farmers for more than 50 years, and the expense to taxpayers reaches hundreds of millions of dollars every year. Without federal subsidies, milk prices would be guided by a milk law from 1949. At that time, following World War II, the government supported dairy farmers until prices reached market standards. Today that could mean prices of $7 a gallon or greater. However, many people believe milk subsidies should end,and the dairy industry should be forced to compete in a more open market where basic supply and demand will determine prices. A libertarian think-tank, the CATO Institute, has long argued against dairy subsidies, and they estimate total farm subsidies cost taxpayers as much as $35 billion each year. There are plenty of reasons to oppose federal subsidies of consumer goods, not the least of which is the creation of artificially high prices for industries that wouldn't be able to compete in a truly free market.
The dairy industry has obviously been in favor of the continued subsidies, and many Americans view milk as a necessary staple of the American diet. Proponents of dairy consumption have long recommended milk consumption by children as a source of calcium, necessary for strong teeth and bones. And the health benefits of dairy products have long been promoted in the ubiquitous Got Milk campaigns, which have made drinking milk part of the national culture. However, others ask whether milk priced at $7 a gallon is really a bad thing for consumers. Not everyone believes that milk is a fundamental and necessary part of the diet. In fact, milk might actually be contributing more to America's health crisis in terms of obesity than it helps in offering consumers a regular source of calcium.
Critics of milk consumption argue that higher milk prices would decrease consumption of a product that is not healthy in the first place. Milk's considerable levels of fat and sugar are cause for concern among the health conscious. Medical professionals like Dr. David Katz have commented on the potentialnegative effects of dairy while not actually arguing that people should or should not drink milk. One primary criticism of the dairy industry's health claims is that no research has proved milk is a necessary part of a healthy diet. On the other hand, anti-milk advocates also cite research by Harvard University that refuted the health benefits of dairy consumption and claimed the vital nutrients in milk could be better gained from other food sources such as vegetables like collards or even fortified soy milk.
Clearly, America's dairy consumption---aided at least in part by subsidies that keep milk prices low---will remain a topic of debate as the government reviews the cost of its spending programs. And Americans are likely to seriously reconsider their support of the dairy industry both through taxpayer supported subsidies and consumer purchases.
Got milk at $7 a gallon? That remains to be seen.
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