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RSS By: Jim Dickrell, Dairy Today

Jim Dickrell is the editor of Dairy Today and is based in Monticello, Minn.

Dairy Policy Deserves House Debate

Jan 14, 2013

Back-room deals only come back to haunt us.

There was more than the usual gnashing of teeth and beating of breasts when Congress and President Obama extended the old farm law at the end of last year.

I wasn’t jumping for joy either. But the alternative—a 2012 farm bill passed by Congressional and Presidential edict without a floor debate in the House of Representatives—was potentially worse. Much worse.

Go back to the mid-1990s when the 1996 farm law was debated and eventually passed. A five-minute-to-midnight deal, made in the Senate-House conference committee, delivered us the Northeast Compact. We’re still dealing with ramifications of that back room meeting 17 years later.

The Northeast Compact was supposed to be a temporary transition through Federal Order reforms then being transitioned into place. New England politicians, in particular Sen. Patrick Leahy (D-Vt.), feared Federal Order reforms would depress milk prices so severely that a special program, created specifically for New England, was in order.

So Leahy insisted the Northeast Compact be part of the 1996 farm bill, holding the entire bill hostage until he got his way. (Leahy is potentially even more powerful this go-round. He is now Senate pro tempore, second only to the Vice President in the U.S. Senate and third in line to the presidency.)

The Northeast Compact outraged producers in just about every other region of the country. Southern states even tried to form their own compacts.

The "temporary" Northeast Compact was eventually extended two years, finally expiring in September 2001. Morphing into its place was the Milk Income Loss Contract (MILC) program, which continued to use the same Boston Class I target price of $16.94/cwt.

Though the MILC program was national in scope, it was limited to the first 2.4 or 2.985 million pounds of annual milk production—depending on the particular period. While every dairy producer qualifies for this coverage, this might represent 12-month protection for a herd with less than 150 cows but just one month’s protection for a herd with 1,500 and a couple of weeks of protection for a herd with 3,000 cows.

That lack of fairness basically brought us to the Dairy Security Act (DSA) in the 2012 farm bill. The DSA has two main components—a margin protection program and a market stabilization program for those who sign up for margin protection. Most importantly, all herds are covered—they merely need to sign up.

But the market stabilization program—dubbed supply management by opponents—is still highly controversial. Had Congress and the President enacted DSA without a House floor debate, dairy processors and many dairy producers here in the Midwest would have been mighty unhappy. (See Robin Schmahl’s column last week.)

It’s one thing to lose a vote after full debate; it’s quite another to be shut out of the discussion.

Collin Peterson, (D-Minn.), ranking minority member of the House Agriculture Committee, was incensed that Republican House leadership refused to bring the farm bill up for debate:

"I see no reason why the House Agriculture Committee should undertake the fool’s errand to craft another long-term farm bill if the Republican Leadership refuses to give [written] assurances that our bipartisan work will be considered."

The farm bill deserves a full debate and vote by the House of Representatives. Back room deals only come back to haunt us.

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COMMENTS (2 Comments)

whinniesg - watrerville, NY
The farce DSA will only put smaller guys out of business. They will be the only ones to sign up for margin ins that won't cover their costs. They will be told to cut back their production while the "big guys" will keep cranking it out.
A 100 cow farmer signs up for the margin ins. A 1000 cow farmer does not. "They" say there is too much milk, so the guys with ins have to cut back 10% or 10 cows. Does he dry off 10 cows and have to feed them for 6 mos, or does he sell them? He sells them and has 90 left. The big guy keeps his 1000 cows. "They" say there is still too much milk and everyone has to cut back another 10%. The little guy sells 9 more cows. The big guy doesn't. Pretty soon the little guy has no more cows. The big guy's solution to everything is to put on 500 more cows. End of story.

We need a cost of production, no farce insurance, and a supply management program that all farmers support.

3:30 PM Jan 16th
cow land - SHERBURNE, NY
"The farm bill deserves a full debate and vote by the House of Representatives. Back room deals only come back to haunt us. " and so will DSA. Do you not think that a full debate and vote by dairy farmers, the ones that have to live with this is not also prudent? If 60% of farms will not sign up for this than how is this good policy?
4:32 PM Jan 14th

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