Milk supply management remains center of farm bill debate
By CAROL RYAN DUMAS
One stalemate over the House farm bill seemed to dissolve with the passage of the Goodlatte-Scott amendment that would take milk supply management out of proposed dairy policy.
But the sigh of relief that dairy policy would finally make it out of the House in the broader farm bill quickly turned into a sigh of frustration when farm bill negotiations crumbled over nutrition assistance programs.
House members' failure to pass a farm bill in their latest attempt, however, is not discouraging to opponents of milk supply management. And proponents of supply management, while disappointed in the passage of the Goodlatte-Scott amendment, are hopeful that farm bill conferees in the House and Senate will eventually reinstate supply management in the final bill.
Dairy policy passed by the Senate and the House Ag Committee both provide federally subsidized margin insurance between dairymen's feed costs and the milk price they receive and supply management. The Goodlatte-Scott amendment, passed overwhelmingly by the full House, retained the margin insurance but eliminated supply management.
That amendment passed by a huge margin, 291-135, more than two to one, said Jerry Slominski, senior vice president of legislative affairs and economic policy for International Dairy Foods Association, which represents dairy processors.
"We think it's going to send a strong signal against supply management in the final farm bill," he said.
It's going to be hard to pass a farm bill that includes supply management given the strong opposition in the House, he said.
The amendment was supported by an overwhelming majority of Republicans, with 196 in favor and 35 opposed, and fell just short of Democratic support, with 95 in favor and 100 opposed, he said.
The support was much higher than anyone expected, he said.
Supply management did pass in the Senate, but the Senate had only one option on dairy policy with no alternative amendment offered to eliminate supply management, he said.
He said he thinks support for supply management in the Senate is "a mile wide and an inch deep" and thinks the Senate would support an alternative that didn't include supply management.
He doesn't think there's much ideological support for supply management among Democrats or Republicans in the Senate, he said.
"It's too intrusive, too anti-trade and too anti-growth," he said.
Proponents of supply management, however, see it as important for a balanced approach to dairy policy.
Margin insurance without the market-stabilizing effect of supply management, as proposed in the Goodlatte-Scott amendment, is fiscally reckless, said Jerry Kozak, CEO of National Milk Producers Federation.
Removing that cost-control mechanism has negative implications for dairy producers and would greatly increase government and taxpayer costs. It would also ensure a supply of government-subsidized, cheap milk for processors, he said.
Idaho Dairymen's Association supports milk supply management as an important mechanism to send market signals to producers and reduce costs to taxpayers, said Bob Naerebout, executive director of the producer organization.
But processors see it as stifling growth in dairy processing, exports and jobs.
"Supply management would not be a good direction to go, especially for California," said Bill Schiek, economist with processor organization the Dairy Institute of California.
It would limit the state's dairy sector the ability to grow, retain business and expand dairy exports, he said.