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WASHINGTON, DC — Dairy organizations had conflicting things to say about the most recent version of the farm bill, which was approved by the Senate Agriculture Committee April 26.
The Senate legislation includes a new, voluntary margin protection program endorsed by National Milk Producers Federation, to better safeguard farmers against “disastrously low margins” like those seen between 2007-2009.
“The Senate has taken a huge step in the right direction by including the dairy reforms modeled after NMPF’s Foundation for the Future program,” said Jerry Kozak, President and CEO of NMPF, in a statement to media. “We commend Senators (Debbie) Stabenow and (Pat) Roberts for their leadership and diligence in shepherding the farm bill past this point.”
Kozak said the dairy title contains a better safety net for farmers in the form of the Dairy Production Margin Protection Program, which offers them a basic level of coverage against low margins, as well as a supplemental insurance plan offering higher levels of protection jointly funded by government and farmers.
Those who opt to enroll in the margin program will also be subject to the market stabilization program that asks them to reduce milk output when margins are poor.
The committee also approved two amendments to the dairy title of the farm bill: One that authorizes a review of the market stabilization program at the end of the five-year farm bill lifespan; and a second that extends the Milk Income Loss Contract Program (MILC) program through June 2013, at a reduced rate, so there is a safety net in place while the U.S. Department of Agriculture implements the new dairy margin insurance program.
“By including provisions of the Dairy Security Act in the (bill), the committee has taken an important first step in truly reforming the dairy safety net, providing producers the tools they need to remain competitive in the global market and facilitate the industry’s growth and long-term sustainability,” said Dairy Farmers of America Senior Vice President John Wilson.
“Since the devastating dairy economy crash of 2009, dairy farmers, industry organizations and cooperatives —including DFA — have worked to develop a new system that better protects the interests of producers in a highly volatile industry,” he continued. “The dairy provisions included in the (bill) provide producers options to protect their margins and the ability to strengthen exports, both of which will be instrumental in maintaining the vitality of the U.S. dairy industry.
The National Farmers Union said it welcomes the adjustments made to the new Agriculture Risk Coverage program, which will allow farmers to choose a coverage plan that allows them to best manage their risk. Additionally, the temporary extension of the Supplemental Revenue Assistance (SURE) program to cover disaster-level losses suffered during the 2012 crop year and of the MILC will provide “needed protection during the transition period” as the next farm bill is implemented.
But NFU President Roger Johnson expressed concern “that the legislation does not do enough to protect farmers and ranchers against long-term price collapses. A program such as the Market-Driven Inventory System (MDIS) would help protect against such collapses and should be implemented in the final bill,” Johnson said.
International Dairy Foods Association praised the margin insurance program for giving farmers “the ability to manage price volatility” without including a supply management policy that “discourages investments by dairy food companies and takes away opportunities for dairy farmers to expand production. ”
IDFA argues against the dairy market stabilization program, saying it will “raise consumer prices, hurt exports, cost thousands of new jobs and stifle investments in new facilities.”
American Soybean Association President Steve Wellman said “ASA is encouraged that the bill includes a revenue-based risk management program that is equitable between crops, and will partially offset losses incurred at either the farm level or the county level.
“Other key features of the bill include its consolidation of multiple conservation programs, targeting of conservation funding toward conservation measures on working lands versus land retirement, authorization and funding for the new Foundation for Food and Agriculture, full funding of the Foreign Market Development Program (Cooperator) and Market Access Program (MAP), and mandatory funding for ASA’s two Energy Title priorities, the Biobased Market Program and the Biodiesel Education Program.”
The policy director for the National Sustainable Agriculture Coalition, Fred Hoefner, said “the committee was able to make sure that hardworking farmers — not mega farms and absentee investors (who do not farm) — are the key beneficiaries of farm programs.”
The Sustainable Ag Coalition also praised the Sodsaver provision, which protects native grass and prairie lands. The provision reduces crop insurance premium subsidies and tightens program rules in a manner that will reduce the “taxpayer-funded incentive to destroy important grassland resources,” according to the coalition.
“These lands are diminishing at a rapid rate and protecting them provides ranching opportunities and economic, environmental, and recreational benefits to rural communities,” Hoefner said.
The coalition also praised the committee for reauthorizing local food and organic programs, such as the farmers’ market and local food promotion program, and National Organic Certification Cost Share.”
The coalition criticized the committee for failing to provide “adequate funding for the beginning farmer and rancher development programs,” minorities and limiting resources for new farmers, and for not making “needed improvements” in farm to school programs.
Robert Guenther, senior vice president of public policy for United Fresh, said the committee “has confirmed what our members have been saying for quite a long time: Investments in fruit and vegetable producers translate into a healthy industry — from field to table — while creating job opportunities and improved nutrition for consumers.
The following provisions are for produce farmers
• Funding of $150 million annually for the Fresh Fruit and Vegetable program; annual funding at $50 million per year for DoD Fresh program to provide fresh fruits and vegetables to schools and service institutions.
• Investment of $70 million annually for the Specialty Crop Block Grant program. The Specialty Crop Research Initiative was funded at $25 million per year ramping up to $50 million by 2017.
• Increased funding of $60 million in 2013 up to $65 million 2017 for pest and disease management programs. The Market Access Program ($200 million per year) and Technical Assistance for Specialty Crops ($9 million per year) were fully funded.
• Hunger-Free Communities Grant Program for fruit and vegetable SNAP incentives was funded at $100 million over 5 years. Farmers Market and Local Food Promotion Program was funded at $100 million over five years.