WISCONSIN FARM BUREAU FEDERATION

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Thank you, Mr. Chairman and members of the Committee for the opportunity to appear and testify before you today.

I am a dairy farmer from Mineral Point, Wisconsin. I am, by today's standards, a small dairy farmer, farming 200 acres and milking 50 cows. I am also a member of the Board of Directors of the Wisconsin Farm Bureau Federation.

I am like thousands of dairy farmers in Wisconsin who are faced with the decision of modernizing/expanding my dairy operation or exiting the business in the next few years.

I started farming in 1979, rented land and facilities until 1988, when I bought my current farm. In 1979 I was one of over 46,000 dairymen in the state of Wisconsin. Today, 20 years later, less than 23,000 dairy farmers remain. Wisconsin continues to lose about four dairies a day, or about 1500 a year. In other words, Wisconsin loses more dairy farmers in one year than most states have in total.

As I decide on how to update my dairy operation, issues such as land base, facilities, technology and financing are all issues that I must consider. One factor that should not be part of my planning is how federal dairy policy will impact my business. I am not a dairy policy expert, and if most are honest, few are.

After years of debate, today's dairy policy continues to be plagued by regional biases and politics. In 1996 Congress ordered Secretary Glickman and the USDA to reform and modernize the depression era Federal Milk Market Order System (FMMO). Farmers across the Midwest finally held out hope that the antiquated milk pricing systems would be scrapped and a new FMMO system would take into account today's technologies and transportation advances. When USDA reform hearings reached Wisconsin, over 500 dairy farmers attended, more than all other hearings combined. This is important, as FMMO reform has become more than a business issue, but also an emotional issue with dairy farmers across the Midwest.

Farmers have become apathetic and cynical as to whether reform can prevail over politics, and whether government has the ability to bring equity and fairness to the industry.

Last spring the USDA unveiled its long-awaited order reforms. We, here in Wisconsin, were not overjoyed by the modest reforms, but realized that they were a small, yet positive move toward a more market-oriented pricing structure. Throughout the previous year USDA heard opposition from southern and eastern states to the initial proposal, so USDA diluted its original modest reform to what eventually became the Final Rule on Federal Milk Market Order reform.

In the fall of 1999 farmers and cooperatives across the country voted on the reform package, and by an overwhelming vote accepted the Final Rule. At that time we were to see implementation of the final rule that would consolidate the number of marketing orders and would bring modest changes to the old Class 1 differentials that price milk using Eau Claire, Wisconsin, as the pricing basis point. We would also see the sunsetting of the price fixing scheme called the Northeast Dairy Compact. However, in November of this past year, regional politics prevailed.

Members of Congress took it upon themselves to overthrow USDA's final rule that had been voted on by farmers and their co-ops, and instead imposed their own reform that was little different than the system that Congress had originally ordered to be changed. In doing this, Congress totally disregarded farmers' rights when they mandated the new FMMO rules without allowing farmers the right to vote on these reforms as stipulated by USDA's own rules.

Where do we go from here?

First, I hope that you have the resolve to:

• help the dairy industry into the 21st century with an inclusive/comprehensive policy that knows no regional barriers;

• understand and accept that milk will be produced where it can be most economically produced, and where there is the infrastructure that can service, process and deliver

the product;

• create a policy that will allow dairy farmers to profit because of their abilities, not because of where they live.

To achieve these goals, I believe that we need to have a policy that has a single, nation-wide Class 1 pricing structure (national pooling) and uniform rules that regulate the manufacturing industy (make allowances).

Only then will we be able to move beyond the regional price distortions, and the temptation of politicians to manipulate the system. If this cannot be accomplished, I think Congress should strongly consider total deregulation, a position that has been endorsed by the membership of the Wisconsin Farm Bureau Federation.

Members of the Committee, please let this hearing be the beginning to meaningful change.

I trust, Mr. Chairman, that this hearing is genuine and not held just as a gesture to appease the Senators from the Upper Midwest.

Mr. Chairman, there are many challenges that need to be addressed that can help all farmers across the country:

• the need for Congress to continue to work on developing trade dialogue that fosters free, fair and open trade;

• the need to continue to examine tax reform issues that would include risk management strategies; and

• the need to address environmental regulatory issues that threaten every farmer today.

Mr. Chairman and Members of the Committee, thank you for the opportunity to come before you today.

Respectfully submitted by Richard Gorder