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EDITORIAL MEMO |
Contact: Reggie James or Rafael Ayuso |
Consumers Union would like to alert you to HB 2000, which passed on April 21st and was referred to the Agriculture Subcommittee of Senate Natural Resources. This bill would mandate that Texas dairy farmers enter into the Southern Dairy Compact, a government approved cartel among milk producers who are impacted by the ups and downs of the milk pricing market. CU is concerned because this bill would only raise retail prices of milk and enrich the largest dairy farmers without guaranteeing small farmers would stay afloat. Some points to consider:
· the cost of milk will rise anywhere from fifteen to thirty-one cents. Low-income consumers with small children cannot look elsewhere to find a cheaper alternative with the same nutritional benefits.· the bill makes allowances to reimburse the WIC program, but does not address other large purchasers, like schools or public hospitals. Additionally, the fiscal note does not indicate increased costs for schools, prisons or other government institutions.
· a similar compact has not stopped small dairies from going out of business in the northeast. Therefore, in the long run the large dairies will be the primary beneficiaries.
· investment in Texas milk producers would be no more attractive than investment in all the other states in the compact, like Oklahoma or Alabama, but would disadvantage producers in non-compact states.
Although Consumers Union is sympathetic to the problems small dairy farmers face with a volatile pricing system and an extremely perishable good, raising the price is not a panacea. Milk is an essential item for raising healthy children and it is irreplaceable in the grocery cart for many families, wealthy and poor. The Senate should see this bill as an inappropriate measure and recognize the hard impact this will have on the budgets of low-income Texans.
