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Dairy Plan is the Latest Hurdle

by Mike Austin

The passage of a new long term farm bill has run into yet another hurdle and this time it has nothing to do with the nutrition program. Matter of fact, there are reports coming out of the committee that they are close to an agreement on a 8-9 billion dollar cut in the food stamp program over the next 10 years.The problem now is the dairy provision of the bill. The hang up is that the conferees seem to be following the lead of Ranking House Ag Committee Member Colin Peterson who is pushing the Dairy Security Act. The plan passed in the Senate as part of their farm bill proposal..contains margin insurance with a market stabilization rider, which is another term for supply management. That concept unfortunately does not sit well with House Speaker John Boehner who has made it clear that he will not allow any farm bill with supply management to reach the House floor. So the issue is at a stalemate...with neither side willing to compromise.

So where does that leave the farm bill? Well another option has surfaced and is actually an old one. Why not bring back the Milk Income Loss Contract Payment Program?. According to a report out of Ohio State...the MILC plan does fall within financial guidelines and does have some political backing.

As for its impact....UW Dairy Economist Mark Stephenson does feel it would provide an adequate safety net for Wisconsin dairy farmers.

However...most dairy groups and organizations are not looking to go back to the MILC Plan. They prefer margin insurance..and some like National Milk feel the only workable plan is to include market stabilization to correct market imbalances that do periodically occur in the dairy industry.  However... there are other groups like the Dairy Business Association of Wisconsin that are just as adamant that any form of supply management would be detrimental to producers in states like Wisconsin where the industry is looking to grow it production. So the arguments go on...the clock continues to tick and the questions continue to be asked about will we pass a new long term farm bill or are we looking at another one or two year extension of the 2008 farm bill...We may have a better answer by February 1st.