By Erik Wasson - 01/13/14 03:14 PM EST
Dairy farmers rejecting farm bill compromise
Lawmakers are mulling a possible compromise to the dairy standoff that is holding up the farm bill, but dairy farmers aren't buying it.
Unless one side backs down, or a compromise is found, the $1 trillion farm subsidy and food stamp bill, which has been delayed for years, could die.
Plans to vote on a bill have been delayed until at least late January due to the impasse.
The ongoing dairy standoff pits Speaker John Boehner (R-Ohio) against rural lawmakers led by House Agriculture Committee ranking member Collin Peterson (D-Minn.).
The compromise could allow farmers to choose between existing Milk Income Loss Contract (MILC) payments and the House version of a margin insurance program, but so far chief advocates for dairy farmers are resisting the idea.
Peterson wants the farm bill to include the Dairy Security Act, a combination of margin insurance for dairy farmers and a supply management limitation meant to prevent prices from plummeting. The margin insurance kicks in when the spread between cattle feed and milk prices shrinks below a set level.
The Senate-passed farm bill contains the full program, and farm bill negotiators had planned to include it in a compromise bill.
However, the House in 2013 approved an amendment to strip out the supply management portion after Boehner sent members a letter urging them to do so. Supporters of the amendment included free-market conservatives and urban liberals worried about the cost of milk for consumers.
Boehner last week said he was “confident” the farm bill conference would not include supply management. The comments were seen as a hardening of his position.
In reaction, Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) urged both sides to find an acceptable accommodation.
One idea being floated was first developed by academics John Newton and Cam Thraen at Ohio State University.
It would retain the expired MILC program from the 2008 farm bill as an option. MILC payments ended when the farm bill expired Sept. 30. Monthly payments were made to farmers when Boston’s milk price fell below $16.94 per hundredweight.
A dairy-using industry source said “the proposal looks doable on both the political and funding levels.” He argued that the MILC program will protect small farmers with 150 cows or fewer while avoiding creating a complex new program of supply management.
While acknowledging the compromise has been scored as costing more than the Senate bill, the source said cost could be fixed by adding fees.
The National Milk Producers Federation is not sold on the Ohio State proposal, however.
“We continue to hold that the Senate-passed Dairy Security Act — also in the current farm bill package — is the only dairy proposal that will provide an effective safety net for all of the nation’s dairy farmers while also protecting taxpayers from the possibility of excessive program costs,” said spokesman Chris Galen.
He added that, in addition to costing more than the Senate proposal, continuing MILC would not protect farmers adequately from risk.
“The main reason is that neither stand-alone margin insurance, nor the MILC and Honey OSU plan, addresses the underlying problem of market imbalances that lead to catastrophically low milk prices. Market stabilization is needed to correct the market imbalances that periodically occur in the dairy industry,” he said.
A source said Sen. Patrick Leahy (D-Vt.), who was crucial to developing the MILC program in 2002 and to the Senate plan, does not support the compromise idea at this time.