NCPA - National Center for Policy Analysis

Taxpayers and Consumers are being Milked

May 3, 2004

Recently rising milk prices ensure that the white liquid will continue to cost more than gasoline. However, milk prices are set by a domestic cartel, not a foreign one. The price of milk, like other farm commodities, is set not by the market but by the U.S. government.

  • Milk will cost 60 cents more this week than last, and twice as much as it did last year -- because the U.S. government has decreed it.
  • Federal taxpayers pay $20 billion a year to subsidize or protect from overseas competition a number of farm goods -- with wheat, corn, rice, soybeans and cotton accounting for more than 90 percent of direct federal subsidies.
  • A recent study found that 2002 Farm Bill, will cost the average household $4,500 by 2012.
  • A 2001 General Accounting Office study found that subsidies to large farms owned mainly by corporations and wealthy individuals tripled since 1991.

The 1996 Freedom to Farm Act was supposed to phase out all these subsidies, but instead they have grown.

Source: Editorial, "Dairy Godmother," Investor's Business Daily, May 3, 2004.


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