Dairy fight continues to muck up farm bill progress

By Derrick Cain

© Copyright Agri-Pulse Communications, Inc.



More fighting over a dairy policy solution for a long-term farm bill continues to bog down action, as lawmakers now eye the last week of January for possible completion.

House Agriculture Committee ranking member Collin Peterson, D-Minn., who has been fairly quiet lately, told Agri-Pulse Tuesday night that Committee Chairman Frank Lucas, R-Okla., is working on some type of dairy compromise, but said that “he hasn't shown it to me” or to Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich. 

“[Lucas] said he is tweaking my language, whatever that means, and what he is trying to accomplish is to make me and [House Speaker John Boehner, R-Ohio] equally unhappy,” Peterson said, noting that he does not expect anything to get resolved this week.

Lets Talk Food

Boehner has consistently opposed dairy stabilization provisions that, along with the Dairy Security Act (DSA), were advanced by the National Milk Producers Federation and strongly supported by Peterson. Instead, Boehner backed the Goodlatte-Scott amendment, which removed what he and many milk processors view as “supply management.” Peterson has said the DSA provisions would limit over-production.

A possible compromise, which Agri-Pulse first reported in our 12-4-13 issue, involves a concept from Ohio State economists John Newton and Cameron Thraen suggesting a re-tooled dairy farm safety net that does not require a market supply program. The economists proposed increasing eligibility of the Milk Income Loss Contract Program (MILC) up to 4 million pounds per year and allowing farms the option to choose annually between: 1) MILC participation, or 2) a stand-alone margin insurance program as their elected safety net, with margin insurance from $4 to $6.50/cwt. However, Peterson balked at the idea.

“I wouldn't rule anything out, except to say the Ohio State concept will not work,” Peterson said Tuesday. “It will not provide a safety net. I don't have a problem if it works - if you come up with something that actually works and I'm upset, that's fine.”

USDA is now operating under permanent law, which could force the department to stockpile milk and cause an increase in the price of the commodity. However, many say the country won't fall off the “dairy cliff” even if lawmakers fail to get a farm bill done this month.

“We would start buying up powder and butter, and it would take quite a while before you raise the price (of milk),” Peterson said. “The big thing would be if you [reporters] got everyone ginned up that there was going to be $8 milk on Feb. 1, that might help us out.”

After a floor vote, Lucas, who has been elusive this week, told reporters Tuesday he was not yet prepared to offer a fresh dairy proposal. “I'm not quite to that point,” Lucas said. “Life is all about compromises.”

In the meantime, Peterson has been pointing to payment limits as the real deal breaker, As we reported Monday, the Minnesota Democrat said Sen. Chuck Grassley's language to tighten the definition of "actively engaged" for the purposes of farm program payments was used as "one of the selling points in the Senate" and now "they are having a tough time backing off of it.

"What Grassley proposed doesn't affect Iowa much but it affects the South big time. It could take the whole bill down,” Peterson told the Red River Farm Network.

But Grassley told Agri-Pulse on Tuesday that he was "at a loss on how the language could somehow be a point of disagreement let alone a threat that could take down the whole bill,” especially given that the limits would help reduce the federal deficit. The Grassley provisions (payment limits/actively engaged) would save $177 million over 10 years.

Both the Senate and House farm bill proposals would cap annual farm commodity payments at $125,000 for an individual and $250,000 for married couples. The bills also tighten rules that define how farmers are actively engaged in an operation - language that Grassley says only Senate Agriculture Committee Chairwoman Debbie Stabenow has been willing to defend, among the four principals.

“There's a reason why opponents (of payment limits and restrictions on actively engaged) don't want a public conference meeting,” Grassley said, because they would not be able to defend their position. “It's indefensible to keep open loopholes for wealthy, wing-tip wearing farmers who don't have dirt under their fingernails while cutting people who receive food stamps,” Grassley emphasized.

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