Dairy groups spar over House Farm Bill amendment
Dairy groups are sparring this week over an amendment introduced in the House Agriculture Committee related to the market stabilization program - what some have called supply management.
The National Milk Producers Federation (NMPF) is urging members of the committee to reject the Goodlatte-Scott amendment saying it "would undo the significant dairy policy reforms proposed for the 2012 Farm Bill."
Introduced by Reps. Bob Goodlatte (R-VA) and David Scott (D-GA), the amendment would eliminate the portion of the dairy title that would have farmers reduce their milk sales when conditions of low margins prevail - that is, low milk prices and high feed costs.
That market stabilization program was part of the "Foundation for the Future" plan advanced by NMPF - an organization including many of the country's dairy cooperatives - over the past three years and was included in the Dairy Security Act that was introduced last year in Congress.
The provision, along with most of the Dairy Security Act, was recently included in the Senate's version of the Farm Bill.
Jerry Kozak, president and CEO of the NMPF said the amendment, if approved by the committee, would "gut" the dairy reforms in the Farm Bill.
"The Goodlatte-Scott amendment guts the dairy reforms that farmers have worked so hard to create," Kozak said.
"And this amendment undercuts these efforts in the worst possible way: by tearing a hole in the insurance safety net offered to farmers in the Farm Bill. Replacing a robust safety net with one that resembles Swiss cheese is bad policy and bad politics."
The original program, proposed in the NMPF plan and then in the Dairy Security Act and the Senate Farm Bill, would offer dairy farmers a basic level of margin protection at no cost, subsidized by the government.
Dairy farmers would also have the option of purchasing supplemental margin insurance to cover a wider gap between the cost of feed and the milk price and give themselves more protection for times when feed costs and milk prices are widely divergent.
Farmers who choose to participate in this voluntary program would be covered by the market stabilization program, which would have them cut back milk production when margins are poor.
Some dairy groups have said that this program would have only these "volunteers" participate in market stabilization, while larger farms that oppose the program anyway, would choose not to participate and would not be subject to any supply management.
Wisconsin-based Dairy Business Association (DBA) issued a statement Tuesday saying its members are "100 percent behind" the Goodlatte-Scott amendment.
The changes proposed in the amendment would "provide a safety net for Wisconsin's dairy farmers without forcing them to participate in a supply management program," DBA said in its statement.
The group cited an analysis done by Mark Stephenson, director of dairy policy analysis at the University of Wisconsin-Madison that has confirmed that this alternative will result in a reduction in milk price volatility in dairy markets, without limiting the growth of the dairy industry.
Kozak argues that the Goodlatte-Scott amendment would drive up the cost of the margin insurance program and increase federal spending. The "amendment punishes farmers who choose to use the margin insurance program by reducing the amount of insurance coverage offered to them," he added.
"This last-minute attempt to unravel years of careful economic analysis and industry-wide collaboration is an affront to farmers, and should be rejected by the members of the Agriculture Committee," Kozak said.