With the Farm Bill hung up in the U.S. House of Representatives, a prominent member of the House Agriculture Committee says the dairy industry could be especially vulnerable to the impasse.
“Dairy is the one segment of agriculture that is in the most jeopardy and the most danger because we have a program that doesn't work right now," Rep. Collin Peterson (D-Minn.), ranking member of the House Ag Committee, told an AgriTalk Radio audience on Thursday.
Federal dairy policy dates back to the 1930s, and there is a growing consensus that the system is broken and needs to be fixed. This year’s drought has exacerbated the problem with rapidly rising feed costs.
“If we have this new margin insurance system in place (as called for in the dairy provision of the Farm Bill), it would basically make the feed cost increases less of a problem,” Peterson said. “It insulates the dairy industry from these gyrations, not only in prices of milk but also in prices of feed. Without it, I think dairy has got some very tough time ahead,” he added.
While most everyone in the dairy industry can agree on insuring the margin between milk price and feed cost, there are some who object to the “margin stabilization” component that is attached to the legislation. It would discourage producers from increasing milk production in times of tight profit margins.
“We have a 90 percent consensus in the dairy industry on the dairy provisions (that have passed in the U.S. Senate and the House Ag Committee),” Peterson says. “That’s about as good as you can get in dairy,” he says, adding he is confident the dairy portion will “hold together” and be in the final Farm Bill.
However, getting the Farm Bill to the floor of the House has been a problem. The House leadership has been holding it up, and some say it is a reluctance to discuss proposed cuts to the Food Stamp program that has Republicans leery going into this fall’s election. Nutrition programs make up about 80 percent of the Farm Bill.
But Peterson says there is some disagreement among Republicans, as well, regarding “the commodity title and crop insurance.”
Peterson says he would like to see a new Farm Bill passed by Sept. 30.
“We’re using August here to see if we can narrow the differences and get language written... so that when we get back (on Sept. 10), if there is a motivation to move this thing, we're in a postion to do it," he says. "We're trying, we're pushing."
Perhaps if enough congressmen “get an earful” from constituents while back in their districts this month, there will be added pressure to get something done on the Farm Bill, he points out.