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RSS By: Jim Dickrell, Dairy Today

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

Why the Farm Bill Flounders

Aug 10, 2012

The division in Congress and among dairy interests mirrors the American people. The result is failure to solve problems. This must stop.

Here’s the hard truth: The reason the farm bill has failed to pass is that the U.S. Congress is made up of people like you and me and our cousins in Chicago and New York and Los Angeles.

“Congress is a mirror of the American people,” says Charlie Stenholm, a former 13-term congressman from Texas. “I don’t think this coming election will change anything. The country is divided 50/50.”

He and Barry Flinchbaugh, the renowned ag economist from Kansas State, participated in a “great debate” about ag policy at the Ag Media Summit (AMS) in Albuquerque last week. AMS attracts about 600 agricultural journalists, public relations professionals and aspiring student ag communicators each year to our annual gathering.

The “great debate” between the “Blue Dog” Democrat Stenholm and your father’s brand of moderate Republicanism Flinchbaugh was a highlight of the conference, with a standing-room-only crowd filling a Hyatt meeting room.

Flinchbaugh was no less frank than Stenholm: “The U.S. Congress is doing to the American farmer what it has done to the U.S. economy since 2007. Congress is doing to the farmer what it has done to small businessmen—failing to act to solve our budget and deficit problems.”

The Stenholm/Flinchbaugh debate did not get into the minutiae of dairy policy. But the debate’s main theme—the refusal to compromise—is the dairy debate writ large. A refusal by the National Milk Producers Federation (NMPF) and the International Dairy Foods Association (IDFA) to compromise makes passing the farm bill all that much tougher.

When NMPF originally proposed Foundation for the Future, it had these components: Elimination of dairy price supports and Milk Income Loss Contract payments, Federal Order reform, margin insurance and market stabilization. It also came with this caveat: Eliminate any one of these components, NMPF said, and the package implodes.

And then NMPF did just that. After months of wrangling, NMPF’s own membership could not agree on Federal Order reforms (or make allowances or a replacement for component pricing), so they were dropped from the package.

Federal Order reform was the one carrot that could have enticed processor support. Left with no incentive, IDFA attacked. It unleashed outlandish charges that Federal Order Class I premiums were pricing milk out of the mouths of babes. And that the market stabilization program will curtail dairy exports and kills thousands of American jobs.

Make no mistake. The market stabilization program is a sticking point, not only between producers and processors, but in Congress as well. Speaker of the House John Boehner (R., Ohio) has flatly said it will not stand.

Rep. Bob Goodlatte’s (R., Va.) amendment—which provides margin insurance on 80% of a producer’s yearly production, annual sign-up for supplemental insurance, and no market stabilization program—is a potential grand compromise. It should be considered.

National Milk would get most of what it wants. IDFA wouldn’t get most of what it doesn’t want. And it would remove one more sticking point in getting the farm bill passed. The clock is ticking.

“Congress has 13 working days between now and the Nov. 6 election to pass a Farm Bill,” says Stenholm. “Can you get a bill through the House and through the Senate/House Conference committee in that time?”

Dairy producers and processors need to do their part. The divisiveness has to stop. We are better than this.


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COMMENTS (8 Comments)

JimD ickrell

Directly from Goodlatte amendment lanuage. Hope this clears up the debate:

18 For the first 4,000,000 pounds of milk mar19
ketings included in the annual production his20
tory of a participating dairy operation, the pre21
mium per hundredweight corresponding to each
22 coverage level specified in the following table is
23 as follows:
‘‘Coverage Level Premium per Cwt.
$4.00 $0.000
$4.50 $0.01
$5.00 $0.02
$5.50 $0.035
$6.00 $0.045
$6.50 $0.09
$7.00 $0.18
$7.50 $0.60
$8.00 $0.95
3 POUNDS.—For milk marketings in excess of
4 4,000,000 pounds included in the annual pro5
duction history of a participating dairy oper6
ation, the premium per hundredweight cor7
responding to each coverage level is as follows:
‘‘Coverage Level Premium per Cwt.
$4.00 $0.030
$4.50 $0.045
$5.00 $0.066
$5.50 $0.11
$6.00 $0.185
$6.50 $0.29
$7.00 $0.38
$7.50 $0.83
$8.00 $1.06
4:17 PM Aug 15th
The Senate and House bills provide free basic $4 coverage tied to Supply Management.

Under Goodlatte-Scott basic $4 coverage is the same for all farms regardless of production. The first 4 million is free and and the cost for pounds over the 4 million is 3 cents per cwt. AND NO SUPPLY MANAGEMENT!!!!

If this perceived inequity is a sticking point I would propose that we all pay 3 cents per cwt to receive $4 margin insurance.
4:01 PM Aug 15th

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