Goodlatte/Scott Amendment Passes, Removes Dairy Supply Management

11:25AM Jun 20, 2013
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The House of Representatives vigorously debated the Goodlatte/Scott amendment this morning for some 27 minutes, and with House leadership support, the measure passed 291-135.

The amendment, brought forward by Rep. Robert Goodlatte, R., Va., and David Scott, D., Ga., would strip out the supply management component of the Dairy Security Act and leave only the margin insurance component.

The debate centered on whether the removal of the supply management trigger would increase the cost of milk and government costs. Rep. Scott pointed to a University of Missouri study authored by Scott Brown that school lunch costs could climb $14 million if supply management was triggered and that retail milk prices could climb as much as 32¢/gallon.

Rep. Collin Peterson, D., Minn., ranking minority member of the House Agriculture Committee, responded that those numbers were not true and were a "complete fabrication." He says milk prices might rise just ½ to 2¢/gal.  He also claimed the cost to government for insurance indemnities could skyrocket without supply management to keep production in check.

Peterson appears more correct, based on Brown’s paper published last month. In that analysis, Brown says milk prices would be 6¢/cwt higher under the Dairy Security Act than current policy, and milk prices would be 19¢/cwt lower under Goodlatte/Scott. However, the range in net revenue is much lower, with farmers realizing a 55¢/cwt gain over current law with the Dairy Security Act and a 48¢/cwt gain in net revenue under Goodlatte/Scott. The cost to government, however, would be $1 billion higher under Goodlatte/Scott, according to Brown. His study can be found here.   

But some members felt that supply management would curtail the U.S. dairy industry's ability to both grow and export dairy products.  Those Gongressmen with large, urban consumer bases also supported Goodlatte/Scott. "When milk prices rise, this hurts the poor and adds insult to injury," says Rep. Barbara Lee, D., Calif. "The farm bill cuts the Supplemental Nutritional Assistance Program (food stamps) and would increase [retail] milk prices." 

A vote on the entire farm bill is expected later today.