Washington, D.C. – U.S. Senator Mark Dayton today joined several of his Democratic colleagues in sending a letter to the leaders of the Senate Budget Committee, urging them to oppose President Bush’s budget proposals that reduce support for dairy farmers when they consider the budget. The Committee will use the budget as a blueprint for a bill which they will draft and present to the Senate in the coming weeks.

“Last year, the President pushed through a 25 percent reduction in MILC payments,” said Dayton. “This year, he's calling for another 5 percent cut and a new fee of 3 cents per hundredweight on all milk production. This is unacceptable.”

President Bush’s budget proposes a new assessment on dairy farmers of 3 cents on every 100 pounds of milk produced. In 2004, this tax would have cost Minnesota farmers $2.43 million. The budget also cuts the Milk Income Loss Contract (MILC) program by 5 percent. Since 2002, Minnesota farmers have received $163.6 million from the program. With a 5 percent cut in payments, the state would have lost $8.2 million during that time.

“The current farm bill has already saved $15 billion, compared to its original price tag in 2002. The President should acknowledge these tremendous savings, instead of calling for further cuts to our dairy programs.”

Dayton also joined his colleagues in sending a letter to the leaders of the Senate Budget Committee urging them not to make cuts to agriculture programs.

The full text of the Senators’ letter on dairy programs is below:

March 8, 2006

The Honorable Judd Gregg The Honorable Kent Conrad Chairman Ranking Member Committee on the Budget Committee on the Budget United States Senate United States Senate SD-624 SD-624 Washington, DC 20510 Washington, DC 20510

Dear Chairman Gregg and Ranking Member Conrad:

We are writing to urge you to oppose the Administration’s budget proposals for our nation’s dairy producers. While the Administration has targeted agriculture programs for much greater cuts than many other government expenditures, hardworking dairy farmers are targeted for even deeper cuts.

The President’s budget targets dairy farmers’ income in three ways: by reducing the value of the price support program; cutting Milk Income Loss Contract (MILC) payments by 5 percent; and taxing every dairy farmer in America 3 cents per cwt. on all of their production. There is no fair or justifiable reason to single out dairy farmers for such drastic programmatic cuts and tax increases.

Though the Administration claims these cuts and tax increases are needed to recover the cost of dairy programs, the MILC program and the dairy price support program cost the government little or nothing to operate in 2005. These proposals amount to unfair taxation, not cost recovery for dairy programs.

Furthermore the President’s plan to impose a new tax on every dairy producer in this country is not only at odds with the Administration’s efforts to extend and expand earlier tax cuts, but it comes at a time when dairy producers are already burdened by high fuel and utility costs, and declining prices. Budgeting for additional tax cuts for some while raising taxes on hard-working family dairy farmers is doubly inexcusable.

We strongly urge you to reject the Administration’s proposed budget cuts and tax increases on America’s dairy farmers.

Sincerely,

Senators Patrick Leahy (D-VT), Arlen Specter (R-PA), Herb Kohl (D-WI), Russ Feingold (D-WI ), Mark Dayton (D-MN), Norm Coleman (R-MN), Paul Sarbanes (D-MD), Barbara Mikulski (D-MD), Jim Jeffords (I-VT), and Jack Reed (D-RI).

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