Dairy Reform Gets Farm Bill Push

6/16/2012 7:00 AM
By Charlene M. Shupp Espenshade Special Sections Editor

Last week, dairy reform was the talk of the beltway as the full Senate began debate of the 2012 Farm Bill, called the Agriculture Reform, Food and Jobs Act of 2012, or S. 3240.

Sound simple? Not so fast. In legislation that is dictated more by region or industry type than politics, crafting the five-year agricultural program creates its own paradigms.

On June 7, the Senate voted, 90-8, to advance the Farm Bill, beginning two weeks of debate to consider the bill and its amendments.

The Senate bill would bring several changes to farm policy, including $23 billion in cuts over the next 10 years. Direct payments would be eliminated. It would cut the food stamp program and includes dairy policy reform.

The proposed dairy section of the bill contains a voluntary margin-protection program and a supply-management program.

The debate over dairy policy is taking place in the midst of a milk price downswing. Global dairy prices have declined over the past two years, according the United Nation’s Food and Agriculture organization, and the FAO Dairy Price Index slumped 12 percent to 164.1 points in May, the biggest drop since 2009.

The milk, feed price ratio has fallen to its lowest level on record, according to the latest USDA report on agricultural prices. The May 2012 preliminary ratio was down to 1.38 — the 14th consecutive month with a ratio below 2.0.

On June 6, young dairy producers spoke in the Senate on behalf of the National Milk Producers Federation to promote the federation’s dairy policy reform, which has been included in the Senate bill.

Virginia dairy producer Sarah Leonard joined Sens. Debbie Stabenow, D-Mich., and Pat Roberts, R-Kansas, the ag committee chairwoman and ranking member, to discuss the bill.

“On our farm, we don’t focus on the latest polls or whose campaign is raising the most money,” Leonard said, according to a federation press release. “We focus instead on how much rain we received last night, how much milk the cows are generating today, and what the market price of corn and soybeans are. That’s our daily reality. But part of that reality is, we need a new Farm Bill.”

On June 7, members of the National Farm Family Coalition held a teleconference saying “not so fast” to the current policy reforms, asking instead for the Senate to adopt the proposals in Pennsylvania Sen. Robert Casey’s dairy bill S. 1640.

“My family and I have been victims of these irresponsible and unconscionable government policies that destabilized hundreds of thousands of dairy farming families,” said Pennsylvania dairy farmer Brenda Cochran.

Her family has been farming since 1975, and she said she believes the Farm Bill “can be the means to cover the costs of milk” as she promoted the points in 1640, which she believes should be included in the Farm Bill.

However, movement on S. 1640 has been challenging, according to Arden Tewksbury, manager of the Progressive Agriculture Organization and a leading proponent of 1640.

“It does not seem to be going very far,” he said of the bill, which has been sitting in the Senate Agriculture committee since the fall of 2011.

These groups are not the only ones working to make changes to farm policy. An estimated 250 amendments have been introduced, several others also focusing on dairy policy.

On Monday, Sens. Kristen Gillibrand, D-N.Y., and Olympia Snowe, R-Maine, announced the filing of an amendment called S.A. 2190, which would allow dairy industry groups to present milk pricing reforms to the USDA for consideration in public hearings, eliminate the end product price formula to set prices for class II milk and require the secretary of agriculture to release the department’s final proposal to industry organizations for approval by referendum.

“For years, New York dairy farms have endured a volatility in the market. As feed and fuel costs rise, the price of milk plummeted,” said Gillibrand, a member of the Senate Agriculture Committee. “When our family farms suffer, our whole state and whole economy suffer. Our farmers deserve a better, more just pricing system.”

On Wednesday, Casey himself announced several amendments to the Farm Bill unrelated to S. 1640. In a press release, he announced a dairy product reporting amendment that follows a push from the Dairy Policy Action Committee, DPAC, which has asked for increased transparency in milk price reporting.

The amendment, S.A. 2238, asks for a study by USDA to look at the potential for a two-class milk pricing system and report back to Congress.

“It’s pretty common sense and pretty budget neutral,” said Dennis Wolff, a lobbyist and former Pennsylvania secretary of agriculture speaking on behalf of DPAC.

Another amendment that DPAC favors comes from South Carolina Sen. Jim DeMint, who has asked to remove the supply management and margin insurance portions of the Farm Bill. DPAC is against supply management, but would like to see some form of risk management in place.

Wolff said LGM-Dairy has been a popular risk management tool embraced by dairy producers. He hopes that as the process continues, LGM-Dairy funding can be secured.

At the end of the day, dairy regulations are a complex set of rules.

“It is such a complex piece of legislation that oversees how milk is priced,” Wolff said. “Anything we can do to simplify (it) ... is a step in the right direction.”

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