Dairy programs under review
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WASHINGTON, Sept. 8- The House Agriculture Livestock, Poultry and Dairy Subcommittee held a dairy policy hearing today in an effort to review current USDA dairy programs. While many legislators agree the volatile dairy market is in need of a stronger safety net, Congress has yet to find an approach that eases the sting of tight margins, especially within the current budget environment.
"The events of 2009 exposed what many have long-held to be an inadequacy of some of our current dairy programs,” said Chairman Thomas Rooney (R-FL). “While some observers may argue that additional funding may improve the overall effectiveness of our dairy safety net, our current budgetary outlook makes this option a non-starter.”
This is the tenth hearing in the series on farm policy that is designed to provide oversight of current spending to ensure programs are delivered effectively. Hearing witnesses from U.S. Department of Agriculture (USDA) Farm Service Agency (FSA) and Agriculture Marketing Service (AMS) officials gave overviews of current dairy programs, which include the Dairy Product Price Support Program (DPPSP), Milk Income Loss Contract (MILC) Program, Dairy Export Incentive Program (DEIP), Livestock Gross Margin Insurance for Dairy (LGM-Dairy), and Federal Milk Marketing Orders (FMMOs).
The reoccurring cycle that affects the dairy industry with low prices, high feed costs and tight margins motivated the National Milk Producers Federation to design Foundation for the Future. The legislative form of this policy proposal authored by Reps. Collin Peterson (D-Minn.) and Mike Simpson (R-Idaho) would provide a safety net based on margin protection, rather than price, and replace both the Dairy Product Price Support Program (DPPSP) and the Milk Income Loss Contract (MILC) Program.
"The general tone of the questions at today's hearing from the committee members indicates a concern that current dairy programs are not up to the task of providing a meaningful farm-level safety net,” said NMPF President and CEO Jerry Kozak. "NMPF shares that concern, and that's what has driven the creation of Foundation for the Future. We believe we have the best answer to the bottom line question of what should come next for dairy policy."
However, the Simpson-Peterson dairy reform bill does not have the full support of the Committee or dairy organizations. The International Dairy Foods Association, for example, opposes a key aspect of the bill, the creation of the Dairy Market Stabilization Program (DMSP). The Association also opposes the FFTF approach to reforming the Federal Milk Marketing Order system.
"The dairy industry has always faced a rocky road, but the past few years have been particularly challenging,” said Ranking Member Dennis Cardoza (D-CA) at today's hearing. “It is extremely important that future dairy policy builds a strong base so dairies can continue to produce milk and consumers can continue to enjoy domestically produced products here at home."
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