Summary: The need to consider alternatives to the present system of dairy import quotas is discussed. Interrelated programs of price supports, marketing orders, and import quotas have been effective in insuring an adequate supply of domestically produced milk and in stabilizing prices for dairy products. The cost of this self-sufficiency and price stability has been higher prices to the consumer and program costs to the government. Several alternative courses of action are available: (1) continued policy of import quotas for dairy products along with the price support program, (2) free trade in dairy products in the United States and abroad, and (3) open U.S. market policy with no import quotas or price support program.
A system of free trade for agricultural products would benefit consumers through lower prices for dairy products. Under a system in which the United States would unilaterally open its market to imports, an Agriculture Department study indicates average consumer savings of about $500 million a year over a 6-year period.
