Dairy Security Act moves forward with mixed support from industry

2012-07-19T11:19:00Z Dairy Security Act moves forward with mixed support from industryBy Peggy Coffeen, Dairy/Livestock Editor Agri-View

With only a few days left before the August legislative recess, the U.S. House of Representatives Committee on Agriculture passed the draft of the 2012 Farm Bill last week by a 35-11 bipartisan vote, rejecting an amendment to strike the Dairy Market Price Stabilization (DMPS) program in favor of a margin insurance program from the Dairy Security Act (DSA).

The amendment, introduced by Reps. Bob Goodlatte (R-Va.) and David Scott (D-Ga.), would have provided a producer safety net without a supply management program. The final 29-17 vote kept it out of the draft. House Ag Committee Chairman Frank Lucas (R-Okla.) and Ranking Member Collin Peterson (D-Minn.) both voted against the measure.

Reactions were mixed among dairy industry organizations. Some were pleased with the consensus, while others continue to call for margin insurance in place of a government-controlled milk supply program.

National Milk Producers Federation (NMPF) leaders communicated their contentment with the move and the inclusion of elements of their Foundation for the Future program. “The fundamental package of dairy policy reforms supported by NMPF remained unchanged throughout the Agriculture Committee’s debate this week,” they said in a statement.

Straight from the Dairy State, Wisconsin Farm Bureau Federation President Bill Bruins also applauded the House Committee’s actions on behalf of his membership. “With the farm bill one step closer to reality, we could not be more pleased that it includes the most significant reform to dairy policy in generations … With the Dairy Security Act still intact within the farm bill, we are very encouraged to finally have consensus on dairy policy reform.” However, he reminds farmers that a few details are yet to be worked out if the new bill is to be signed before the current bill’s expiration date of Sept. 30.

National Farmers Union (NFU) President Roger Johnson issued the following statement giving his approval to the rejection of the amendment for the DMPS program. “… although NFU is skeptical of the untested dairy insurance program included in the Act, one thing that would certainly make the program wholly ineffective is allowing dairies to increase production unchecked. Eliminating the supply management provision would be disastrous and would lead to a repeat of the low prices the industry has seen in recent years.”

Not all dairy groups were pleased with the passage. Several collaborated to send a letter to Reps. Lucas and Peterson favoring a margin insurance program over milk supply controls. Signing onto this letter last week were California Dairies, Inc., Dairy Business Milk Marketing Cooperative, Dairy Policy Action Coalition, National All-Jersey, Inc., North East Dairy Producers Association, Inc., and Wisconsin Dairy Business Association.

Likewise, processor group the International Dairy Foods Association let their apprehension be known for the Dairy Market Stabilization Program, citing potential price increases for consumers and negative impacts on exports, jobs and industry growth and expansion.

“The Dairy Security Act remains a risk to America’s dairy industry, yet is being sold as the solution,” the joint letter said. “The program would attempt to manipulate both supply and demand for milk in order to temporarily push milk prices higher. A short-term gain in milk price from supply management will result in a long-term decrease in milk price because of the lost global market share. Not being a reliable supplier threatens the U.S. competitive edge in international markets, reducing our opportunity for continued success in export markets.”

“The nation’s dairy producers support reform, but the DMPS is the wrong direction. Reforms should not reduce exports, cut jobs and add more regulations. The Dairy Title should allow the dairy industry a chance to compete and grow without government regulating the amount of milk a farmer can produce. Our citizens and the world population deserve an abundant, affordable and sustainable food supply.”

In a separate letter, the Minnesota Milk Producers Association also maintained their position in favor of a safety net program but opposed to the supply management measures.

With the current Farm Bill set to expire on Sept. 30, Rep. Peterson made note of the critical timeline for approving the draft and avoiding an extension of current programs. “If the House leadership fails to bring up this farm bill before the work period, they will jeopardize one of the economic bright spots of our nation’s fragile economy. Farmers need the certainty of a five-year farm bill. We cannot wait for the mess that will occur during the lame duck and, frankly, I think an extension of current farm policy potentially creates more problems than it solves. I am hopeful the House leadership gets this right and brings the bill to the floor shortly, so we can ultimately finish the bill in September. It’s time to move past the partisan games and get to work.”

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