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House Agriculture Committee passes farm bill

By Janet Kubat Willette
jkubat@agrinews.com

Date Modified: 06/05/2013 2:30 PM

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WASHINGTON — The House Agriculture Committee passed the farm bill on a 36-10 vote, but not without spirited debate on several issues.

The dairy provision was one of those issues. Rep. Collin Peterson, D-Minn., and ranking member on the House Agriculture Committee, worked to achieve a compromise on dairy legislation for four years.

It was a helluva fight, Peterson said.

Peterson's dairy legislation repeals the Dairy Product Price Support Program, the Milk Income Loss Contract program and the Federal Milk Marketing Order Review Commission.

In their place is a voluntary, basic-level margin insurance coverage along with the opportunity for producers to buy supplemental coverage. Those who participate in the Dairy Producer Margin Protection Program agree to manage the supply of products through participation in a Dairy Market Stabilization Program.

"All it takes is 2 percent" oversupply for the farm gate milk price to collapse, Peterson said.

In 2009, the demand for dairy products went down and when combined with increasing milk production had a devastating impact on dairy farmers.

His goal is to have a way to deal with an oversupply of milk, while not getting in the way of what the industry needs to do long term.

Peterson's legislation is in the bill as passed out of committee, but an amendment offered by Rep. Bob Goodlatte, R-Va., and Rep. David Scott, D-Ga., nearly derailed Peterson's language.

The Goodlatte-Scott Amendment failed 20-26. It strikes the Dairy Market Stabilization Program and replaces it with a stand-alone Dairy Producer Margin Protection Program.

No one disagrees on the need to reform dairy policies, Goodlatte said, but he disagrees with the supply control program, saying it involves government intervention in commercial transactions.

Dairy policy also was a roadblock to farm bill passage last year, he said.

Scott said their amendment provides an effective safety net without adding supply management, which raises the price of dairy products and milk for consumers. He said the Dairy Market Stabilization Program will raise the price of milk by 50 cents a gallon, hurting millions of families with young children. It will also raise the price of the federal government's nutrition programs.

Milk consumption has been going down for decades, Scott said, urging his colleagues not to adopt policy to further erode consumption by making dairy products harder to afford.

Peterson said the Goodlatte-Scott Amendment is driven by the Intentional Dairy Foods Association, which represents privately owned manufacturers and marketers. Eighty percent of the milk in the United States is collected by cooperatives, he said.

He challenged fellow members to tell him the last time they remember when any processor lowered prices. Any time prices go up at the farm level, prices increase in the retail case. When prices fell to $10 per hundredweight in 2009, retail prices didn't decline.

A gallon of milk is cheaper in Canada, where they have a quota system, than it is in the United States. Canadian farmers are paid $30 a hundredweight, Peterson said.

He called the Goodlatte-Scott Amendment "a free lunch, have your cake and eat it too amendment" that sticks it to the government.

Rep. Joe Courtney, D-Conn., spoke in support of Peterson's measure. The last farm bill had inadequate measures to address the 2009 drop in farm-gate milk prices, he said. Peterson's proposal is an attempt to build a system for when dairy is in crisis. He said, if activated, the measure may increase dairy prices by 1.5 cents to 3 cents per gallon over a year.

Peterson's solution is built for the hard times and the good times to protect the nation's fragile dairy production industry, Courtney said.

Rep. Tim Walz, D-Minn., said the compromise serves Minnesota well and he thinks it will prevail. His constituents from AMPI and Land O'Lakes are behind the Peterson plan.

Committee Chairman Frank Lucas, R-Okla., reminded his committee that dairy has never been an easy issue. A difference exists between regions, processors and producers of different sizes. It's difficult to achieve consensus within the industry.

Most sectors of agriculture have had a pretty decent decade, but dairy has been on a roller coaster.

He described the farm bill as a giant jigsaw puzzle and his job is to move the puzzle forward. The base bill, which included Peterson's dairy policy, is the best opportunity to do that, Lucas said.

"Remember, we have to have a farm bill when all this is over with," he said.