Center for American Progress

A Discussion with Paul Rozwadowski on the Farm Bill
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A Discussion with Paul Rozwadowski on the Farm Bill

Paul Rozwadowski is dairy farmer from Stanley, Wisconsin, and the chairman of the Dairy Subcommittee of the National Family Farm Coalition.

Listen to the interview:

Can you describe your farm a bit? I know you said you’re a dairy farmer from Wisconsin. How long have you been farming? Did your family farm? What do you produce?

Well, it’s a dairy farm. We produce milk. We’ve been here since 1979. So about 28 years. It’s about a fifty to sixty cow, milk cow, operation with another fifty to sixty heifers, 120 head of cattle all together. We got 360 acres, about 250 of it tillable. We raise alfalfa, corn, some oats, and hay.

So, now does your farm receive subsidies?

Yes, some. We get some of the payments in the spring, for crop payments. And of course we’re covered under any of the dairy programs.

How effective do you think the farm bill has been in improving your ability to farm?

Pretty much zero. There’s many aspects of it I don’t like and the new proposal that came out of the House and the stuff that’s coming out of the Senate for the new farm bill are pretty much copycats of the same. They got a milk payment program which they started in, I think it was 1996, because the price of milk was so low. And that is fixed at a figure that just doesn’t reflect what is going on with prices today, with prices of input, cost of production.

The proposal in the new bill is unrealistic. I feel it’s totally bogus for them to even bother talking about extending the milk payment program because it is a safety net that is set far below the cost of production. That kind of makes it meaningless. There are a lot of problems. With the last bill they had a temporary forward contracting scheme for private plants. Basically that is a scheme for them to pay under the federal milk marketing order price. And now, of course, they’re all proposing it in the new farm bill even though the USDA did a study which showed that no farmers came out on the deal at all. No farmers made any money. Zero. And they’re still pushing this real hard.

It’s a very dangerous thing because it’s the same type of thing that happened in the hog industry, in the poultry industry, and the poultry industry now has gone all to forward, or to contracting farming. There’s virtually no independent farmers, poultry farmers left, and hog production is not far behind. And we don’t want to see this happen in milk.

I think part of the problem is that in the farm bill, the dairy processors are allowed to make an allowance, that’s where all the processors make so much, guaranteed to them just for processing the milk. It comes directly out of the farmers’ milk check. It’s not an actual deduction that we see on our slips, but it comes right off the top before anything else is figured in, and this sort of thing is a disincentive for the processors to pay the dairy farmers anything because they make their profit no matter what the price of milk is. So they may or may not even care what the price of milk is. Along with the CME, which is supposed to be a clearinghouse for excess cheese and butter and powdered milk, and it’s such a thin market that they’re manipulating the price pretty much any way they want. So there are all kinds of problems.

Another thing is block voting, which started somewhere in the ‘80s. It was a congressional act. And I find this to be the most anti-American thing I’ve ever seen in this country. The co-ops can block-vote for their members. They’ve taken advantage of it to the point where when there are proposals by the milk marketing orders that farmers are supposed to vote on, all they do is ask the co-ops, or the CEOs of co-ops, how they would vote on such a thing. If they say, “Well, we’re going to vote for it,” well they don’t even bother bringing it up to the farmers. So it’s getting to the point where the farmers don’t even have a say in it.

So do you feel farmers have been left out of the national debate on the farm bill?

Yes, pretty much because none of these things that I just told you about, that I read that Congress that is going through, has been�???????????????? you know they’re not talking about any of these things.

Have you found that farm policy is being fair in spreading the subsidy wealth, or no? That the money that’s being spent is concentrated in certain areas, rather than other areas?

The group of people that I work with, the farmers, and they’re all dairy farmers, and as far as dairy goes, we really don’t feel that we even need any subsidies. What we want is a fair price from the marketplace. It’s there and consumers shouldn’t have to pay twice for their product and farmers should get a cost for production, or at least have cost of production figured in as a factor.

In this past year and in the coming year, it’s more important. Cost of production is just more important than anything else because we’ve got skyrocketing fuel prices, of course, and that doesn’t look like it’s going to come down. No, it looks like that’s going to go up higher. And when you’ve got higher fuel prices that has a direct reflection on fertilizer. The figures I’m getting from fertilizer dealers, that is that next spring fertilizer is going to be up 30 percent over last spring, and last spring it was up about 30 percent. The same with feed prices, the same with price of electricity, the same with machinery and parts prices–everything is going to be way up. That’s why instead of talking about milk payments, which are going to be way too low to do anybody any good, they need to be talking about a cost of production.

So you think reforms like that would be more effective than the current subsidy system?

Absolutely. The USDA itself for many years, you know decades, they keep track of the cost of production, either region by region, maybe even state by state, and the figures that I’ve seen from what they keep are pretty accurate. We would have no problems if they would use the cost of production if they would use the USDA figures themselves.

A lot of people have said the current farm bill tends to discriminate against minority farmers, small farmers, and farmers not producing one of the five main commodities (corn, soybeans, cotton, rice, and wheat). What you’re saying is echoing that. So dairy farmers have felt left behind by the nation’s overall farm policies? By concentrating on the farm bill, it leaves other farmers who may not need farm bill subsidies behind?

I think the commodity prices for grains are high because of the ethanol thing. That made corn go way up and because of that, soybeans followed and other grains followed. Well, for a lot of small family farmers that raise their own on their own farm and feed it to them, that high price doesn’t really fit in. It doesn’t hurt them, doesn’t help them, because they’re raising their own anyway. Actually it does, it does help them depending on the price of milk as long as they’re getting enough for their price of milk. Because some of the big farms, the huge factory farms out West or wherever, that rely on buying their grain, well that’s costing them quite a bit more. That’s discouraging milk production on these larger farms that have to purchase everything.

I don’t know if you have confronted this in your work, but what is your take on the argument that farm subsidies to farmers here in the United States hurt disadvantaged farmers in the developing world?

I think it’s more our trade policies that are doing that because it allows the big companies, the big grain companies in this country, to sell in other countries at below their cost of production. They basically dump on these countries, and that forces those farmers out of business. This is what happened with Mexico when the NAFTA deal was put through. So many Mexicans farmers got displaced off of their land. They couldn’t grow corn or whatever cheaper than what it was coming in from the United States. And they basically lost their farms. And that’s why we got so many of these Mexicans that are coming up into this country and looking for jobs. If you talk to any of them or most of them, you find out that most of them are displaced farmers. And you know, that causes a lot of chaos in many different ways.

How would that affect milk cost for the consumer?

I don’t think it would affect it a whole lot because if you look at what milk is selling for, and what dairy products are selling for at the retail level right now, there is such a huge difference between what they’re selling it for and what the farmer is getting. I don’t think it would have much of an effect at all. In fact actually right now, the price of milk is pretty high. It’s pretty good right now, and the price in the stores has gone up a little bit but not dramatically. And the gap in between, these milk processors and retailers have such a huge gap in between to play with, that they are making money any way they look at it.

So putting some of the profits back into the hands of farmers instead of the processors and retailers that would be your advice?

Yes, and having the price that the farmer gets paid come from the marketplace. Not come from government subsidies.

So do you have anything else you would like to add?

I would like to encourage our legislature to talk more to farmers and a little less to the big agribusiness. It seems to me that it’s agribusiness that is formulating the farm bill and not the farmers. The original intent of the farm bill, the USDA started this way back, Abraham Lincoln started it, and the intent was a bill for farmers, to help farmers and our government has gotten away from that. They just lean toward everything agribusiness pushes them into.

For more information about CAP’s policies on the Farm Bill, see:

 

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