Processors’ Perspective

February 6, 2013 — IDFA’s Jerry Slominski has this week’s Processors Perspective:

We think that the farm bill extension, included in the fiscal cliff agreement, was the right approach for dairy. While we support reforming our dairy policies and agree that Congress needs to take a longer look at our farm program, it is not a failure that Congress did not pass a BAD farm bill. It is an opportunity to focus on what is most important to us as an industry to work together on what we all agree on.

Nearly everyone agrees that dairy farmers need a safety net, then let’s get together and support programs that help producers through difficult financial times. But the divide over supply management is real and wide, despite what you may hear from its supporters.

The evidence that supply management won’t work is big and getting bigger. Supply management hasn’t worked in other countries, and it has not worked here with other commodities. As a result, opposition to the policy is growing and getting bigger. Rather than something that can be forced into a last minute budget bill, dairy supply management is a major impediment and stands in the way of getting a five year farm bill through Congress.

Even the American Farm Bureau Federation seems to be looking for a way towards consensus. During their annual conference, they approved a dairy policy study committee and were quoted when asked about current dairy policy reform efforts, that “we wouldn’t have supply management as part of that package” except that they are worried about available funding for margin insurance on its own. My translation is that they know it is bad policy to limit growth and exports but believe is it necessary for budgetary reasons.

Well, they do not have to worry. The Congressional Budget Office reviewed a proposed margin protection plan for dairy producers that was not tied to the so-called stabilization program, and reported that this plan cost slightly less than the Dairy Security Act with supply management. So funding is not the issue, it can be worked out. It means that you can have a margin insurance program just like other ag sectors, without the government telling you how to run your farm.

That stand-alone approach, authored by Representatives Bob Goodlatte (R-VA) and David Scott (D-GA), would authorize a margin protection program without USDA-imposed limits on production. Consumer groups, taxpayer advocates, the restaurant and food industry, and a growing number of dairy farmers agree that this is a better approach to reforming dairy policy.

Audio Version:

WP-SpamFree by Pole Position Marketing