The package that has just passed the House and Senate should do just that. Adjustments that have been made in our original margin insurance program will make it affordable and effective, and should ensure that the margin protection safety net is just that – a safety net, and not a production stimulus.
The revised bill also will direct that, if farm-level margins again fall to 2009 levels, USDA will purchase consumer-ready (as opposed to bulk commodity) dairy foods for speedy donation to food banks. The federal budget cost of this program is likely to be higher than the program NMPF initially advocated. If that is the case, policymakers who proclaim the mantle of fiscal responsibility yet opposed our efforts to control program costs have no one to blame but themselves.
With the signature of President Obama, we reach the end of a long, tortured path leading to a new five-year farm bill. I believe the resulting dairy program will provide an effective and reasonable safety net, one that we have been striving to create these last many years. Whatever its shortcomings, it is far better than the programs it replaces.
2014 certainly appears, at this early stage, to be shaping up as a good year for milk producers. But the roller-coaster of pricing always cycles back down, eventually, necessitating a safety net for the bad times that follow the good. Creating such a safety net was the goal of NMPF five years ago, and while we haven’t gotten exactly what we hoped, the end result most certainly is badly needed, and will be helpful in the years ahead.