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Dairy policy reform efforts face uncertainties

Published on January 10, 2013 3:01AM

Last changed on February 7, 2013 7:50AM

House leaders oppose efforts to manage milk supply


Capital Press

As dairy groups prepare for another push in Congress to insert margin insurance and other policy reforms into the next farm bill, leaders in the House and Senate will start with a clean slate, some industry representatives say.

Charlie Garrison, a Washington, D.C., lobbyist representing Idaho Dairymen's Association, Western United Dairymen and several other dairy producer groups, said the industry first needs to step back and take a look at current market conditions and consider what's doable in Congress.

When producer groups started talking about reform three years ago, milk prices were at record lows and feed costs were at record highs. Today, milk prices have rebounded, but feed costs are still at record highs, he said.

Ag committee members have said they won't start working on a new farm bill until March. When they do, House leaders say they will oppose efforts to manage the milk supply, a voluntary element of reforms included in the version of the farm bill the Senate passed last year.

In the meantime, Congress on Jan. 1 passed an extension of the 2008 Farm Bill after efforts to adopt a five-year replacement stalled. The extension avoided an antiquated dairy policy required by a 1949 law that would take effect when the 2008 bill expired, but it left in place a network of dairy policies few producers say they like.

The November elections, which brought new members to Congress, did not change support for the Dairy Security Act, which was included in farm bills passed last year by the full Senate and the House Ag Committee, he said.

"It's the same political makeup we had," as far as the same president and Democratic majority in the Senate and Republican majority in the House, he said.

But it is a new Congress, so technically everything starts over, he said. Producer groups need to talk with politicians to see where they want to go, he said.

It's too early to tell what might be proposed in a new farm bill, but dairy reform seemed settled in the ag committees, he said. The stumbling block in the new farm bill was not the dairy section but the commodity title, he said. Funding for nutrition programs such as food stamps, which makes up about 80 percent of the spending in the farm bill, was also a sticking point in the House.

The National Milk Producers Federation will continue to push a farm bill that includes the Dairy Security Act, which is based on its Foundation for the Future proposal.

"We need to spend the coming months figuring out how to move farm policy forward," Jerry Kozak, president and CEO of the federation, said in a press statement.

The renewal of the current programs doesn't offer dairy farmers a meaningful safety net, and the status quo is not an acceptable outcome, either for farmers or taxpayers, he said.

NMPF plans to reiterate the value of the Dairy Security Act, which eliminates the dairy product price support program, direct payments and export subsidies. In their place it establishes a voluntary risk management tool for farmers that saves the government money, he said.

The act includes voluntary, federally subsidized insurance to protect producers' margins between the price of milk and feed costs. It also includes a controversial milk supply management program that is voluntary unless a producer participates in the margin insurance plan.

"Obviously we need to see what the path forward is," said Chris Galen, NMPF senior vice president of communications.

But the organization is assuming both the House and Senate ag committees will start with legislation similar to what they passed last year, containing the Dairy Security Act.

"We're in good shape there," he said.

The International Dairy Foods Association will continue to oppose supply management and to push an amendment by Reps. Bob Goodlatte, R-Va., and David Scott, D-Ga., that contains margin insurance but not supply management, said Jerry Slominski, IDFA senior vice president for legislative and economic affairs.

After the House's failure to pass a farm bill containing the Dairy Security Act, IDFA thinks it will find majority support in the House for the compromise amendment that doesn't go against free market concepts, he said.

House Speaker John Boehner, R-Ohio, has said he doesn't want to see the Dairy Security Act go through, calling it a "Soviet-style" policy.

"I think it'll be very hard for the other side to keep thinking they can just keep pushing the Dairy Security Act and get it through. I think this is a wake-up call for them," he said.


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