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Published February 22, 2011, 09:11 AM

Leaders urge consensus before dairy program is rewritten

WASHINGTON — Agriculture Secretary Tom Vilsack and key House Democrats said Feb. 17 that Congress should consider rewriting the dairy program this year, but House Agriculture Committee Chairman Frank Lucas, R-Okla., said he will bring up a bill only if the dairy farmers and processors agree on how the program should be changed.

By: Jerry Hagstrom, Special to Agweek

WASHINGTON — Agriculture Secretary Tom Vilsack and key House Democrats said Feb. 17 that Congress should consider rewriting the dairy program this year, but House Agriculture Committee Chairman Frank Lucas, R-Okla., said he will bring up a bill only if the dairy farmers and processors agree on how the program should be changed.

Industry issues

While most of agriculture has prospered in recent years, dairy farmers have had a hard time with export problems after melamine was found in Chinese dairy products and with rising feed costs.

The current dairy program was inadequate to respond to the dairy crisis, and Congress and USDA have been called upon to provide additional aid to farmers.

There has been sentiment within the industry for a rewrite of dairy policy, and the National Milk Producers Federation, the nation’s largest organization of dairy farmers, has developed a policy called Foundation for the Future.

Equitable deal

Achieving consensus on national dairy policy is particularly difficult because milk is produced in all 50 states and dairy farmers are often at odds because of regional and size differences.

One element of the National Milk proposal involves using government powers to control the supply of milk, The International Dairy Foods Association, which represents dairy processors, has objected to the supply management provision on the grounds that it would constrain dairy supplies and limit growth of the industry.

Vilsack has established a dairy advisory committee, and said at a House Agriculture Committee hearing recently he expects the committee’s report to be released in early March.

“The committee represented every interest in dairy,” Vilsack said, adding that there’s “a good deal of agreement, not unanimous consensus.”

At the hearing, House Agriculture Committee ranking member Collin Peterson, D-Minn., and Rep. Jim Costa, D-Calif., both said that the dairy program should be reformed sooner or later.

“We can’t wait for the farm bill to address this,” Peterson said. Given the price drop that dairy experienced in 2008, he added, “We should move sooner than later if we can get a consensus.”

Quick action

Costa added that he has “never seen it this bad this long in dairy” and that the program should be rewritten before the next farm bill comes up in 2012.

“It behooves us to look for a solution as soon as possible,” Vilsack told the House committee. “You don’t want to lose energy in the industry.”

He made the same point to the Senate Agriculture Committee at a later hearing, saying “think of taking up (dairy reform) before you get to the 2012 farm bill.”

But asked by Agweek about the prospects for a bill this year, Lucas said the committee would take up the bill “if the dairy industry can come up with consensus. Consensus requires everybody.”

Vilsack told Agweek he does not know if the dairy industry can reach the level of agreement Lucas wants.

“I don’t think there’s complete consensus, but there’s more consensus than there was a year ago.”

One farm lobbyist said dairy processors are under pressure to agree to a small supply management program this year on the grounds that dairy producers might succeed in getting a larger supply management program in 2012 if dairy becomes the last item on the agenda and Congress wants to finish the farm bill.

But another lobbyist questioned whether any farm group would want to have its program rewritten this year because House Republicans would be likely to insist that the cost of the program be lowered. Dairy farmers want to use current government spending on dairy, about $100 million per year, on a new program.

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