logo

Dairy industry split over proposed subsidy legislation

image
Author: Chris Hinyub
Created: 28 September, 2011
Updated: 13 October, 2022
2 min read

A bipartisan proposal to reform federal milk subsidies drew support from a leading dairy farmers group on Monday after it was announced that participation in a component milk supply-control program would be optional. However, another large group, which represents the interests of milk processors as well as producers, remains opposed to the measure.

 

Ranking Democrat on the House Agriculture Committee, Rep. Collin Peterson, developed the plan to better protect dairy farmers from another crisis like the one suffered during the hard economic times of 2009 when feed costs increased sharply and milk prices fell. As a result, hundreds of dairy operations were shuttered.

 

IVP Existence Banner

Originally, Peterson wanted limits on how much milk farmers could produce when the price of milk minus the cost of milk production (a function of feed costs) sunk to a certain level. His new plan, introduced with co-author Mike Simpson (R-Idaho) last Friday, is a compromise for farmers who've voiced concerns about letting the federal government constrain their business. The right answer, they say, is less government intervention in dairy operations.

 

After several months of public comment, Peterson agreed to make the so-called “dairy market stabilization program” voluntary for producers. However, participation in the program will be mandatory for farmers hoping to qualify for federal insurance on their milk “crop”. The insurance program would require farmers to pay premiums that would allow them to collect more generous government payouts in lean times. If milk producers choose not to participate, they would get a much smaller subsidy.

 

IVP Existence Banner

The nonpartisan Congressional Budget Office says the measure will save the federal government $167 million over the next five years. That is, only if at least 60 percent of dairy farmers in the country sign up and agree to supply controls.

 

National Milk Producers Federation president Jerry Kozak called the bill “good policy as well as good politics.” The federation will be encouraging its members to lobby their congressional representatives to co-sponsor the bill, he says.

 

IVP Existence Banner

On the other side of the coin, the International Dairy Foods Association said it remains opposed to any form of supply management, but would support better risk management options, such as the above mentioned insurance program but without any strings attached.

 

     “IDFA opposes milk pricing regulations that would increase the already significant regulatory burden on processors, put more pressure on declining milk sales, and increase costs for consumers, as well as many government nutrition and feeding programs that are already stretched to serve Americans who are struggling to feed their families,” reads a recent IDFA press release.

 

IVP Existence Banner

House Agriculture Committee Chairman Frank Lucas (R-Okla.) says he will not support a dairy reform package in advance of the 2012 Farm Bill unless all sides are in agreement. For this reason alone, the bill's prospects are uncertain.

 

The stakes are high, as the dairy industry is a $110 billion a year revenue generator for the U.S. economy. California remains the top dairy producing state.

Latest articles

votes
Wyoming Purges Nearly 30% of Its Voters from Registration Rolls
It is not uncommon for a state to clean out its voter rolls every couple of years -- especially to r...
27 March, 2024
-
1 min read
ballot box
The Next Big Win in Better Election Reform Could Come Where Voters Least Expect
Idaho isn't a state that gets much attention when people talk about politics in the US. However, this could change in 2024 if Idahoans for Open Primaries and their allies are successful with their proposed initiative....
21 March, 2024
-
3 min read
Courts
Why Do We Accept Partisanship in Judicial Elections?
The AP headline reads, "Ohio primary: Open seat on state supreme court could flip partisan control." This immediately should raise a red flag for voters, and not because of who may benefit but over a question too often ignored....
19 March, 2024
-
9 min read
Nick Troiano
Virtual Discussion: The Primary Solution with Unite America's Nick Troiano
In the latest virtual discussion from Open Primaries, the group's president, John Opdycke, sat down ...
19 March, 2024
-
1 min read
Sinema
Sinema's Exit Could Be Bad News for Democrats -- Here's Why
To many, the 2024 presidential primary has been like the movie Titanic - overly long and ending in a disaster we all saw coming from the start. After months of campaigning and five televised primary debates, Americans are now faced with a rematch between two candidates polling shows a majority of them didn’t want....
19 March, 2024
-
7 min read