Processors’ Perspective: Farm Bill Debate Continues

November 6, 2013 — It looks like the Farm Bill debate is finally nearing a conclusion and dairy policy remains one of the key issues yet to be resolved. IDFA’s Jerry Slominski provided the

Jerry Slominski, IDFA

Jerry Slominski, IDFA

Processors’ Perspective on Wednesday’s DairyLine Radio program:

Given the fact that the House of Representatives voted down supply management by 291-135, a more than 2-1 margin, even season veterans of many Farm Bill’s like Mary Kay Thatcher, the lobbyist for the American Farm Bureau, are predicting that the controversial stabilization program is not very likely to be included in the final Farm Bill.

As a result it is becoming clear that Congress is coalescing support behind the Dairy Revenue Insurance Programs that are both in the House and Senate bills, looking at ways to help and improve that important policy.

Just this week, for example, Dr. Marin Bozic from the University of Minnesota released a paper concluding that both the House and Senate dairy titles will be “very effective in providing catastrophic dairy margin insurance.”

Dr. Bozic recommends that Congress insert a six month time lag between when a farmer decides to sign up for margin insurance and the start of the coverage period. He says this is an important feature to include in the farm bill for dairies because they will help stabilize prices and insure that decisions are based on risk management rather than gaming the system to maximize indemnities from the government.

Those who are concerned over the possible cost of the insurance  programs are surely taking a look at Dr. Bozic’s recommendations.

Another dairy compromise is recently proposed by academics at Ohio State and Illinois. This option would allow farmers an annual sign up choice between either the MILC program or the new margin program, giving greater flexibility in this management option to both small and large farmers under a variety of situations

As the Farm Bill conference moves forward, its members will gravitate towards the areas where there is strong bipartisan consensus. In dairy, we believe they will look to improve upon the proposed new margin insurance program that both producers and processors support. That program is a common ground, compromised dairy policy that has been endorsed by both the House and Senate and will allow our dairy industry to grow and thrive.

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