“The DSA allows farmers to better manage their risks, offers a better safety net, reduces government involvement in our industry, and positions our entire industry to compete in a global marketplace. It is simple, affordable, and convenient,” he said.
Importantly, Kozak noted that the DSA is voluntary. The farmer “has a choice to accept a free basic margin insurance, as well as subsidized supplemental insurance, in which they share the costs with the government. As part of that agreement, they will be asked to manage their milk output through the Dairy Market Stabilization Program when worst-case conditions appear. Or, they can forgo government assistance, and not be subject to the DMSP.”
He pointed to the fact that the Market Stabilization program also contains triggers so that it does not activate when the world price and the domestic price are out of alignment, “a situation that could negatively affect the ability of the U.S. to export our products,” he said. Critics of the Market Stabilization program have said that the program will choke off dairy exports, but Kozak pointed to the ongoing financial commitment that America’s farmers make in both the U.S. Dairy Export Council and the Cooperatives Working Together program.
“Why would NMPF support a program that would negatively impact the investment of all those producer dollars?,” Kozak asked.
Kozak said the DSA would not raise consumer prices, but “merely reduces price volatility, and frankly, that benefits farmers, processors and consumers alike.”
The full House Agriculture Committee is expected to write a Farm Bill later this spring, and today’s hearing was part of the effort to consider policy options as part of that process.