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Published January 10, 2014, 02:41 PM

Dairy policy bogs down farm bill

The farm bill negotiations have been bogged down over dairy policy.

By: Jerry Hagstrom, Agweek

WASHINGTON — The farm bill negotiations have been bogged down over dairy policy.

Farm bill leaders returned to the nation’s capital last week hoping to hold a public conference on the issues, only to discover that House Speaker John Boehner, R-Ohio, had told House Agriculture Committee ranking member Collin Peterson, D-Minn., that he would not bring up the bill if it contained a provision to limit dairy production under certain circumstances.

Farm leaders are still hoping that agreement will be reached, and the bill will be passed by late January or early February, but it is uncertain. The dairy conflict has emerged after consensus has apparently been reached to cut about $9 billion from the food stamp program over 10 years, and there seems to be basic agreement on the commodity title, which has split corn and soybean producers and rice and peanut producers. Payment limits for large, wealthy producers, however, have not been settled.

It is not unusual for dairy policy to be the last issue settled in farm bill negotiations, but in the past, it has often been a conflict among dairy producers in different regions.

The bill that Peterson and the National Milk Producers Federation developed is based on insurance to protect the farmers when production costs rise more than dairy prices, but it includes a provision to discourage dairy farmers from increasing production when prices are low. Dairy farmers call that program market stabilization, but dairy processors organized by the International Dairy Foods Association call it supply management and oppose it because they say it will cause spikes in prices and supply shortages that would make it difficult to be considered reliable suppliers for foreign customers.

The Senate-passed farm bill includes the bill that Peterson and National Milk developed. The House Agriculture Committee also approved the same bill as the Senate, but on the House floor members voted to eliminate the market stabilization and supply management provision. Peterson and National Milk say without that provision, government costs could rise to unacceptable levels, and there could be a taxpayer rebellion against it.

In December, Peterson had said the dairy issue was settled to his satisfaction, but apparently that was only among the conferees. Boehner told Peterson that if supply management were in the bill, it would not come up on the House floor and he has stuck to that position.

Late last week, some farm bill conferees were considering a proposal that would give producers a choice between a continuation of the current Milk Income Loss Contract payments or the new margin insurance program, but without the market stabilization and supply management provision, Agweek learned.

Payment limits

Meanwhile, Reps. Bob Goodlatte, R-Va., and David Scott, D-Ga., who had sponsored the House bill amendment that removed the provision, urged the conferees to take their approach.

Sen. Mike Johanns, R-Neb., said he was surprised the dairy issues had resurfaced, adding he thought those had been resolved before the Christmas break, DTN reported on Jan. 9.

“My impression was the dairy issue was put to bed,” said Johanns.

In addition to the supply management issue in dairy, Johanns said conferees also remain at odds over payment limits on farm programs.

“They are always controversial. They tend to pit certain crops against certain crops and certain regions against certain regions. Those two issues, I think, are holding this up,” Johanns said.

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