The House could be moving closer to resolving the impasse over dairy that has so far stymied passage of a five-year farm bill.
House Agriculture Committee Chairman Frank Lucas (R-Okla.) said Wednesday that work is moving forward on a compromise dairy subsidy reform.
“We’ve got a good idea and there’s lots of folks looking at it," Lucas said. "Let’s just say that nobody said no so far, and the world I operate in, it’s a miracle."
Lucas has been caught between his party leader, Speaker John Boehner (R-Ohio), and his partner in crafting the farm bill, Rep. Collin Peterson (D-Minn.), because of the dairy issue.
Boehner doesn't want any future dairy program to include supply management aimed at limiting production and driving up milk prices. Peterson wants a margin insurance program that protects dairy farmers when the price differential of feed and milk drops, and says supply management is needed to keep the cost of the insurance low and farmers fully protected.
Lucas said the compromise does not have supply management but instead is seeking another disincentive to stop farmers from overproducing milk in response to the subsidy.
“You have to have disincentives to cause the market to make rational decisions. That’s not just dairy policy, that’s everything in life,” he said. “This compromise has to provide a rational market signal without telling you how to turn the valve on your milk tank.”
“We’re moving forward until somebody tells us no,” Lucas added.
Peterson said he has not seen “language” on the proposal but appeared to know some details. On Tuesday he said he is open to a compromise as long as it provides enough protection to producers.
At this point a farm bill draft isn't expected to be released before next week’s Martin Luther King Jr. Day recess. Formal legislative work could begin on it the week after, but this would be complicated by a three-day House GOP retreat in Maryland that week.
The longer the farm bill is delayed, the more likely its expiration will affect spring planting decisions.
Negotiators have said that the dairy compromise is one of the last, if not the last, issue to be decided.
Republicans and Democrats on the farm bill conference committee have agreed, sources said, to a resolve a difference over food stamps that initially appeared to be the toughest item in the bill. Food stamps are to be cut by $9 billion, which is $5 billion more than the Senate wanted and $30 billion less than the House sought.