David Obey: “I am concerned that the USDA is not being aggressive enough in encouraging dairy exports through the Dairy Export…”

“I am concerned that the USDA is not being aggressive enough in encouraging dairy exports through the Dairy Export Incentive Program, or DEIP, which allows us to compete in world markets with highly subsidized exports in the European Union. About 10 percent of DEIP contracts are apparently canceled, I understand due mainly to price undercutting by our competitors. For whatever the reason, we apparently have about 40,000 metric tons of canceled nonfat dry milk contracts dating back to June of 1995. This canceled tonnage can be reprogrammed for export by allowing exporters to rebid for them, but the Foreign Agricultural Service appears reluctant to do that, perhaps fearing that it may be taken to the WTO court by the European Union. Mr. Chairman, as we know, DEIP saves money. It is cheaper to export surplus nonfat dry milk than it is for USDA to buy it and store it. Removing this product from the domestic market would have a beneficial impact on dairy prices. As such, again, I would ask the chair of the subcommittee to help me convince USDA to propose a solution to resolve the problem by the time we have reached conference on this bill, one that might include establishing a procedure for automatic rebidding of canceled tonnage.”