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Biden has a plan to save America's dairy, but does it go far enough?

Biden has a plan to save America's dairy, but does it go far enough?
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Back in March, Joe BidenJoe BidenIRS to roll out payments for ,000 child tax credit in July Capitol Police told not to use most aggressive tactics in riot response, report finds Biden to accompany first lady to appointment for 'common medical procedure' MORE’s Super Tuesday rally was disrupted when two animal rights and environmental activists rushed the stage yelling “Let Dairy Die” — a cry also heard at other events during the Democratic primary. 

Activists are right about dairy’s environmental impacts. Milk’s footprint dwarfs that of plant-based alternatives, and dairy cow burps and manure account for 82 million metric tons of carbon dioxide, over 13 percent of all agricultural emissions. The sector also receives substantial — and largely ineffective — federal support. Between 2016 and 2019, for example, the sector received $47 million just from USDA purchases and still lost almost 9 percent of its dairy farms in 2019.

But pulling the plug would not dissolve the industry or resolve its negative impacts, especially since consumers would still demand dairy products, albeit in smaller quantities. And the resulting farm foreclosures could accelerate environmentally damaging commercial development. 

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Fortunately, Biden isn’t planning to let dairy die; he intends to revitalize it, should he win in November. His proposal to increase the adoption of beneficial technologies and practices, for example, would increase incomes, reduce costs and mitigate emissions. But, while a strong start, Biden’s proposal is still too narrow in its ambition to tackle underlying challenges and overhaul traditional dairy support programs. 

Without also addressing overproduction and falling demand, Biden would leave substantial economic and environmental benefits on the table. In a recent report, a colleague and I lay out a roadmap for realizing these benefits, which include up to tens of million metric tons of carbon dioxide equivalent greenhouse gas reductions.

Overproduction is a perennial problem. When prices rise, farmers add more cows to production but often collectively overshoot the mark. Then, when prices fall, they can’t suddenly stop cows from producing milk. This waste of milk and environmental resources depresses prices. As of April, the industry was estimating that supply exceeded demand by 10 percent, and farm-gate milk prices had fallen 32 percent since the previous November.

Instead of tackling overproduction and price volatility, however, government programs like USDA dairy purchases and margin coverage guarantees tend to exacerbate it. Replacing these programs with a supply management system and expanded export promotion investments would narrow the production-consumption gap, stimulating demand and calibrating supply to that demand.

Canada’s supply management program, which limits dairy production based on market conditions and projected demand, offers a model and proof of concept. Canada has boosted and stabilized farm-gate prices without burdening consumers: milk retail prices in Canada are only somewhat higher than in the U.S. and are comparable to other major dairy-producing countries, like Australia and New Zealand. 

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Neither supply management nor new technologies will entirely insulate U.S. dairy farms from changing consumer tastes, industry consolidation or international competition, but the next administration can help farmers adapt to these pressures by also supporting them in diversifying their operations. 

Diversification can shrink a farm’s environmental footprint and improve its financial viability, and it’s especially advantageous for smaller farms, which are better able to benefit from economies of scope than economies of scale. It’s a strategy that Wisconsin Gov. Tony EversTony EversTrump's early endorsements reveal GOP rift Biden rescinds Trump-approved Medicaid work requirements in Michigan, Wisconsin Wisconsin governor declares state of emergency over wildfires MORE (D) has endorsed, noting that fruits and vegetables are one of the few growing and profitable agricultural sectors in the state. 

The next administration can help struggling farms diversify and transition by accomplishing the following objectives: reducing financial burdens to encourage investments, facilitating sales of stranded assets and providing technical assistance to ensure success.

The administration can reduce financial burdens, for example, by awarding agricultural conservation easements to dairies that improve their financial and environmental sustainability by diversifying their operations. In addition to improving farmers’ financial security, allowing them to pay off debt and upgrade their operations, conservation easements also preserve valuable farmland, much of which is at risk of commercial and residential development. 

A conservation easement program, along with other policy actions — establishing a dedicated dairy diversification task force within the NRCS’s Conservation Technical Assistance Program and consolidating credit card debt into no or low-interest Farm Service Agency loans, to name two — could ultimately prevent thousands of farms from folding.

As Biden fleshes out his policies, he has a chance to chart a sustainable path forward for dairy, redirecting federal funding to improve economic and environmental outcomes. As they stand, Biden’s proposal would undoubtedly yield economic and environmental benefits, but it would fall short of remedying the environmental ills activists have rightly criticized. To accomplish this, Biden must address overproduction and pressures like falling demand by making supply management and dairy diversification a priority. 

Caroline Grunewald is a food & agriculture analyst with The Breakthrough Institute.