As legislators prepare themselves to start up discussion on the Farm Bill next week, dairy groups are positioning for a battle over their preferred dairy program options.
The National Milk Producers – set to support a "Dairy Security Act" that includes a market stabilization program coupled with margin insurance – sent a letter to legislators along with 52 dairy organizations urging inclusion of the program.
The letter noted that dairy producers need "a financially-sound risk management program to help farmers better manage margin volatility." The organizations said that 2009's low milk prices and high feed costs – which led to the development of the DSA, they said – were experienced again by America's dairy farmers last year.
"Without the discipline offered by market stabilization, low milk prices will continue for longer periods. This is detrimental to farmers. Low milk prices will lead to more government outlays. This is detrimental to taxpayers," the letter said.
A competing proposal to the Dairy Security Act, the "Dairy Freedom Act," sponsored by Rep. Bob Goodlatte, R-Va., is supported by the International Dairy Foods Association and 30 dairy product manufacturers.
The DFA would establish a dairy margin insurance program to replace the standing Dairy Product Price Support Program, the Milk Income Loss Program and the Dairy Export Incentive Program.
The plan does not include the NMPF-supported market stabilization plan, which DFA supporters call "supply management." Opponents of market stabilization plan said its mechanism that requires farmers to idle milk production or take a milk check deduction in response to market indicators is "contrary to the goals of limited government."
Jerry Slominski, IDFA senior vice president for legislative and economic affairs, said the IDFA-sponsored bill mirrors everything in the DSA except the supply management provision.
"The Dairy Freedom Act would resolve a very contentious issue that has played a significant role in delaying the Farm Bill," Slominski said.
The Dairy Security Act is expected to be included in the Farm Bill versions proposed by Senate Agriculture Committee Chair Debbie Stabenow D-Mich., and House Agriculture Committee Chair Frank Lucas, R-Okla.
During the last Farm Bill talks, both the House and the Senate Agriculture Committees approved the market stabilization program in the Dairy Security Act. Reps. Goodlatte and David Scott, D-Ga., offered an amendment challenging the stabilization program to the 2012 Farm Bill, but it was defeated in the House committee 29-17.
The DSA, however, was not included in the extension of the 2008 Farm Bill.
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