Dairy Security Act costs increase

The Congressional Budget Office (CBO) recently updated the score for the 2013 Farm Bill and found the Dairy Security Act (DSA) in the House of Representatives, which includes a supply management program, will now cost an additional $441 million dollars over 10 years.

"The Dairy Security Act supported by the National Milk Producers Federation has numerous unintended consequences as evidenced by the new cost estimates prepared by CBO," commented Laurie Fischer, executive director of DBA. "NMPF has always told farmers that the supply management part of the DSA is necessary to keep costs down, but clearly that is not the case now."

Dairy farmers need risk management tools to provide them a safety net for volatile times of low milk prices not supply management.

Representative Goodlatte of Virginia and Representative David Scott of Georgia have proposed a margin insurance program that is not tied to supply management requirements.

The Dairy Business Association (DBA) and the Dairy Policy Action Coalition (DPAC) supports Reps. Goodlatte and Scott's approach, which would cost $100 million less than DSA, and would provide a more meaningful dairy safety net program over the Dairy Security Act.

This approach, referred to as the Goodlatte/Scott Amendment in the 112th Congress, would create a voluntary dairy margin insurance program without requiring enrollment in a supply management program.

Like other agricultural insurance programs, Goodlatte/Scott encourages farmers to take a proactive approach to managing their risk and to share in the costs of such a program, rather than subjecting the industry to supply management.

DBA and DPAC have been strong opponents of the "Dairy Market Stabilization Program", which is included in the Dairy Security Act (DSA). When DMSP triggers and feed costs are at their highest, dairy farmers are not paid on up to 8 percent of their production, and instead these funds are sent to USDA.

DSA would pull the U.S. dairy industry out from a vibrant and growing world dairy market by placing artificial limitation on a dairy farm's milk production. Global demand for dairy products has been steadily on the rise.

If the U.S. can't provide a consistent supply of dairy, another country will take our place greatly harming our dairy industry.