Taxpayers on the hook for $3 billion to push small dairy farms out of business?
The proposed cure is worse than the disease. The disease is farm milk price volatility and ongoing narrow to negative milk-to-feed margins that have crippled many dairy farm businesses.
The proposed cure is the Dairy Security Act which was introduced by Rep. Collin Peterson (D-Minn.).
The Dairy Security Act was recently analyzed by Mark Stephenson from the University of Wisconsin-Madison. Stephenson’s analysis indicates that the Dairy Security Act would reduce dairy farm income, reduce exports, increase the rate at which smaller farms exit the industry and cost taxpayers more than $3 billion dollars over the five-year life of the proposed legislation.
Federal dairy policy needs to be simplified. Market distorting programs such as the Dairy Product Price Support Program need to be eliminated.
The Federal Milk Marketing Order system needs to be changed to encourage competition among buyers.
Interest in LGM-Dairy has exploded beyond its funding. Funds that currently support MILC could be used to grow the LGM-Dairy program.
The U.S. dairy industry needs to improve price discovery and market transparency. The Dairy Advancement Act, introduced by Sen. Robert Casey (D-Pa.) accomplishes all of the above dairy farms, even the small ones, are an important part of our local, state and national economy.
We need federal dairy policy that will allow dairy farmers to succeed without being a burden to taxpayers. The Dairy Advancement Act, S. 1682, is the right choice to accomplish these goals.
The 2012 Farm Bill is being (or already has been) crafted behind closed doors, and the Congressional “Super Committee” may get a farm bill that includes the Dairy Security Act as the only change to dairy policy with no committee process and no hearings.
Unfortunately, Congressional Budget Office (CBO) scoring puts the Dairy Security Act at a favorable number for the budget, but the financial risk to the taxpayer is far greater than the projected cost.
It would be like being asked to agree to repairs on your car that will probably cost $1,000 but maybe as much as $5,000. It would be wrong for the Senate and House Ag Committee leaders to hide behind a CBO score while ignoring analysis by leading dairy economists.
It would be wrong to ignore the obvious negative impact on the profitability of all dairy farms.
It would also be wrong to quietly submit new dairy legislation to the Super Committee, when the proposed legislation has the potential to cost taxpayers many times more than current policies or other alternatives.
Hopefully, my Ohio U.S. Senator Rob Portman, and the other 11 members of the Super Committee, will realize the shortcomings of the Dairy Security Act, and return the dairy portion of the farm bill to the committees and stakeholders to openly explore solutions, including the Dairy Advancement Act, that will better serve all parties.
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