Things could get interesting for dairy policy once the House Agriculture Committee version of the Farm Bill makes it to the House floor.
House Speaker John Boehner (R-Ohio) is on record as saying “we have a Soviet-style dairy program in America today, and one of the proposals in the Farm Bill would actually make it worse.”
The reference apparently was to a "market stabilization" provision that would encourage dairy farmers to limit production increases in times of tight profit margins.
"The thing that's a point of contention is this stabilization fund," U.S. Representative Collin Peterson (D-Minn.), ranking member of the House Ag Committee, acknowledged to AgriTalk Radio on Tuesday.
Peterson also gave some insight into Boehner and his experience with dairy policy decisions.
"John hates the dairy program," Peterson said. "He was on the (House Ag) Committee for 16 years, and his main focus then was to get rid of the dairy program," he added. "Speaker Boehner is never going to be happy unless we get rid of the whole program."
Peterson defended the dairy policies in the House Ag Committee version of the Farm Bill, saying they are are "very reform-minded" and "100 times better than what we've got now."
Chris Galen, senior vice president of communications at the National Milk Producers Federation, says the challenge ahead is to show Boehner and others that the reforms in the House Ag Committee version of the Farm Bill are indeed improvements to current dairy policy.
Ending the role of government as a buyer of surplus dairy products and ending direct payments to farmers do make the system more market-oriented and save the taxpayers money, Galen told an AgriTalk Radio audience on Monday.
“Anything we can point out that saves the government money and saves the taxpayers money ― that’s something I think the leadership in the House has to take seriously,” he said.
Philosophically, the reforms sought by the National Milk Producers Federation, which are in the House Ag Committee and Senate versions of the Farm Bill, are a more self-reliant approach, he adds.
“If you want help from the government in terms of this margin insurance, then you have to offer to be part of the solution by trimming your production when conditions are really bad to help bring supply and demand back into balance,” Galen said. “If you’re not willing to do that, then why should you be there accepting help from the government?”
The insurance Galen is referring to would kick in and provide payments to farmers when the margin between the feed price and the milk price tightens to a certain level ― again, indicative of tough economic times. It would be a voluntary program, but in order to accept the insurance payments, a producer would have to agree to participate in “market stabilization,” which is the supply-management provision that Speaker Boehner is referring to.
“I don’t think anybody involved in milk production here in the U.S. really would know what it would be like to be a Soviet-era farmer from 20-plus years ago,” Galen said in reference to Boehner’s earlier comment.
It’s unknown if the House Ag Committee’s version of the Farm Bill will come up for discussion prior to the August recess.
On the same AgriTalk program on Monday, House Ag Committee Chairman Frank Lucas (R-Okla.) said there are a number of other issues on the agenda for the remainder of July. But it remains his desire to get the bill out on the floor of the House as soon as possible.