Subject: BST = tax$ ? response summary
From: [email-masked]
Date: 11 Aug 1994 18:17:23 -0000
Newsgroups: alt.sustainable.agriculture

I recieved more mail from people who were also interested
in how much Federal money might be going indirectly to
Monsanto as a result of increased milk production than
from people who knew the answer, so I thought I'd
summarize here.

Of the two helpful responders, one was an Ag Economist from
Texas A&M, and the other reminded me that one of the top
Dairy Ag Economists in the US is here at WSU, one G. Willett.
I called Dr. Willett, who was very patient and helpful.  Between
him and the Texan Ag Economist, here's what I learned:
currently the milk support price (the price at which the
government begins buying milk in order to maintain the
price) is around $10.10 (per hundredweight, I think).  The
actual market price is somewhat above that, so the government
has been buying very little milk.  In fact, congress authorized
the purchase of 5 billion pounds milk equivalent (I make
that to be 50 million hundredweight), but so far this market
year, which ends at the end of September, only about 3 billion
has actually been purchased.  Much (or at this point, maybe all)
of the money used to make these purchases comes from producer
assessments, so little or no taxpayer money is actually used
in the purchases.  Estimates of course exist on BST's potential
effect on production.  Estimates on the effect on price are
also available (but slightly less reliable, I would think).
Estimates of whether price reductions would force the price
to the support level are much harder to come by, but it was
Dr. Willett's impression that this is not very likely, at
least not this year.

Those are the facts, filtered through me, who obviously knows
very little about the dairy industry.  Hopefully I didn't garble
them too much.

Several writers indicated an interest in how public resources are
used to support, directly or indirectly, development and marketing
of certain products.  In fact, the Texas Ag Economist wrote that
asking how much Federal money Monsanto might recieve through BST
sales is "like asking how much government subsidy does Monsanto
get from the operation of the feed grain support program because
they sell agricultural chemicals to producers who recieve the
benefits of government crop support programs."

I am very interested, mostly at this point on a philosophical
level, in the effect of federal funding of basic research and
biotechnology on agriculture, and I'd be delighted to discuss
such issues with other likeminded individuals.

Steve Verhey
Department of Crop and Soil Science
Washington State University
Pullman, WA  99161