Dick Groves
Editor, Cheese Reporter


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Obama Leaves His Mark On US Dairy, Food Policy

Donald J. Trump was sworn in today as the 45th US President, while Barack Obama left office with what can only be described as a pretty noteworthy record when it comes to dairy and food policy that will be difficult if not impossible for Trump to top (and he may not want to top anyway).

In the area of dairy policy, Obama’s biggest accomplishment was signing the 2014 farm bill, which repealed the Dairy Product Price Support Program. That program had been around since 1949, and had come under a fair amount of criticism starting back around 1980, after the support price had been increased several times under the 1977 farm bill and after government purchases of surplus dairy products started to skyrocket (in 1980, USDA’s Commodity Credit Corporation purchased about 350 million pounds of cheese, 257 million pounds of butter and 634 million pounds of nonfat dry milk).

The dairy situation got so bad — and so expensive for the federal government — that USDA convened a “Dairy Economics Symposium” in March of 1982 to provide the dairy industry with an opportunity to provide input to USDA regarding possible courses of action that might be taken to work out of the excess supply situation.

Replacing the price support program with a program that would make direct payments to dairy farmers in times of low prices was one of the alternatives suggested. But when President Ronald Reagan left office in early 1989, the price support program was still intact (although the support price had declined quite a bit from its high in the early 1980s).

Credit for signing the first farm bill that ended the dairy price support program goes to President Bill Clinton. Under the 1996 farm bill, the support price was to be reduced by 15 cents per hundredweight in 1997, 1998 and 1999, and then the program was to be terminated on January 1, 2000 and replaced with a recourse loan program.

But that never happened. Congress reauthorized the support program in 1999 (for calendar year 2000) and in 2000 (for calendar year 2001), then for larger chunks of time in both the 2002 and 2008 farm bills.

But the support program came under considerable criticism starting in 2009, as milk and dairy product prices crashed amid a worldwide economic recession and the price support program proved to be a woefully inadequate dairy producer safety net. In its 2011 final report, USDA’s Dairy Industry Advisory Committee recommended that, if Congress could come up with a better safety net program for dairy farmers, it would support ending the Dairy Product Price Support Program .

So Congress and the dairy industry came up with the Margin Protection Program for dairy producers, and the 2014 farm bill repealed the price support program.

Not only did the only farm bill signed by Obama end the long-standing price support program, it also terminated two other dairy programs: the Dairy Export Incentive Program (DEIP), which was established by the 1985 farm bill (and was established in part to help reduce surpluses); and the Milk Income Loss Contract (MILC) program, which dated back to 2002.

Whether or not the MPP program is the long-term answer as a dairy producer safety net remains to be seen, but the elimination of the price support program, along with the DEIP and the MILC program, leaves a pretty noteworthy dairy policy legacy for Obama.

In the food policy arena, the one accomplishment that stands out in Obama’s eight years in office is the Food Safety Modernization Act, which was passed by Congress in late 2010 and signed into law by Obama in early 2011.

The significance of the FSMA can be summed up pretty easily, because at the time it was passed by Congress, it was described as the most significant overhaul of the US food safety system in over 70 years (the previous most significant overhaul was the Food, Drug, and Cosmetic Act, which President Franklin Roosevelt signed into law in 1938).

Probably a better way to look at the significance of the FSMA is to look at how long implementation is taking. Last year, FDA issued the sixth and seventh major final rules required under the FSMA (those final rules were for food defense and the sanitary transportation of food). It actually took a court order back in February 2014 just to get FDA to issue all of these final rules by May 31, 2016.

Implementation of the seven major final rules will continue well into the first term of the Trump administration. In fact, back in August 2016, FDA announced the extension of certain compliance dates of the FSMA final rules; the last of those extended compliance dates (for the produce safety rule), January 26, 2021, would be early in Trump’s second term, or early in the first term of his successor. And that’s assuming that FDA, under Trump, doesn’t further extend some or all of those compliance dates.

The FSMA might be Obama’s biggest legacy in the food arena, but it’s certainly not his only legacy. Among many other things, FDA last year issued a final rule updating the Nutrition Facts label, which hadn’t been significantly altered in more than two decades. Compliance dates for this final rule will be during Trump’s first couple of years in office.

And last summer Obama signed a GMO labeling bill that will ensure that food marketers don’t have to deal with a patchwork of state GMO labeling laws. USDA has a couple of years to finalize a GMO labeling system.

All in all, Obama definitely left his mark on both dairy policy and on food policy. And the effects of his eight years in office will be felt for many years to come. DG

Cheese Reporter welcomes letters to the editor. Comments should be sent to: Dick Groves by Fax at (608) 246-8431; or e-mail your comments to
dgroves @cheesereporter.com.


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