IDFA CEO Expresses Concerns About Trade Implications Of New Dairy Import Tax

Claims U.S. dairy farmers will be required to promote dairy imports.

Washington: The president and CEO of the International Dairy Foods Association expressed concerns about the impact that the implementation of controversial new assessments on dairy imports will have on trade.

"We trade with more than 150 countries and continually advocate for open markets and trade policies that comply with international laws," says Connie Tipton, IDFA president and CEO. "This international tax does not help expand our U.S. dairy export markets and has been widely opposed by our trading partners."

Last week, the Obama administration reversed a pro-trade decision of the Bush administration when the U.S. Department of Agriculture announced the final rule on the establishment of a dairy import assessment. The program was first authorized in the Farm Security and Rural Investment Act of 2002 (2002 Farm Bill) and later amended in the Food, Conservation and Energy Act of 2008 (2008 Farm Bill), with clear instructions from Congress that the program was not to be implemented if it did not comply with U.S. trade obligations.

"With this decision by USDA, we are concerned about how other countries will respond to our dairy exports once they become aware of the extra administrative burden and cost with limited or no benefits," says Tipton.

USDA will now collect 7.5 cents per hundredweight on imported dairy products and other foods with dairy ingredients, including cocoas and dough. The money collected by the government will be turned over to an advertising and promotion program currently operated and funded by U.S. dairy farmers. The new rule stipulates that, because importers are adding additional funding to the program, USDA will require U.S. dairy producers and importers to jointly develop programs to build demand for imported dairy products and dairy ingredients.

"It's unclear to us why dairy producers are willing to promote dairy imports at a time when U.S. dairy imports are declining and our U.S. exports are growing," says Tipton.

The International Dairy Foods Association (IDFA), Washington, represents the nation's dairy manufacturing and marketing industries and their suppliers, with a membership of 550 companies representing a $110-billion a year industry. IDFA is composed of three constituent organizations: the Milk Industry Foundation (MIF), the National Cheese Institute (NCI) and the International Ice Cream Association (IICA). IDFA's 220 dairy processing members run more than 600 plant operations, and range from large multi-national organizations to single-plant companies. Together they represent more than 85 percent of the milk, cultured products, cheese and frozen desserts produced and marketed in the United States.