Road map for dairy reform outlined in Dubuque
By Jean Caspers-Simmet
simmet@agrinews.com
Date Modified: 08/04/2011 9:19 AM
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DUBUQUE, Iowa —Foundation for the Future is a new road map for dairy policy, said Jerry Kozak, president and CEO of the National Milk Producers Federation.
Kozak and NMPF senior vice presidents Jaime Castaneda and Jim Tillison described the three parts of the proposal to 60 dairy producers and other industry officials at a meeting last week at the Grand River Center in Dubuque.
The day before, NMPF officials held a similar meeting in Alexandria, Minn., which attracted 120. Kozak said they will conduct 12 meetings on the program in July and August throughout the country.
In the midst of the 2009 dairy depression, NMPF called on dairy producers and cooperative members for guidance, Kozak said. The NMPF Strategic Planning Task Force formed subcommittees to address the current programs and consider what needed to be changed. More than a year of meetings led to Foundation for the Future which proposes replacing federal dairy support programs with the new Dairy Producer Margin Protection Program. It would revise Federal Milk Marketing Order programs and establish the new Dairy Market Stabilization Program to prevent extreme margin and price volatility.
"Farmers said they want a safety net," Kozak said. "2009 resulted in an tremendous loss of equity all across the country. Farmers told us they want stability. Our members also want a program that supports growth."
Kozak acknowledged that Foundation for the Future isn't perfect.
"It has warts," he said. "But we have to focus on what's possible. There have been some very well-intentioned proposals that don't have a snowball's chance of getting anywhere."
Supporters were pleased that U.S. House Agriculture Committee Ranking Member Collin Peterson, a Minnesota Democrat, released a discussion draft which incorporates the key elements of Foundation for the Future on July 13. Kozak said a discussion draft provides members of Congress with the opportunity to allow fellow representatives, stakeholders and constituents the chance to view the language prior to the official introduction. Kozak said they hope to see the bill introduced before the August recess.
The Congressional Budget Office has evaluated the legislative draft to assess its budget impact, and that process necessitated two changes, compared to the original Foundation for the Future package as proposed by NMPF, Kozak said.
The amount of basic margin coverage in the Dairy Producer Margin Protection Program has been adjusted from 90 percent to 75 percent of a producer's production history. This change saves money, compared to the current baseline for dairy. The DPMPP supplemental coverage option remains at 90 percent of the producer's production history.
In addition, due to a number of issues that deal with tax provisions and the overall federal budget deficit, CBO has determined that 50 percent of any dollars collected as a result of the implementation of the Dairy Market Stabilization Program will be remitted to the U.S. Treasury, rather than being spent to purchase dairy products.
"To submit 96 pages of legislative language and have only two changes that don't hamper the effectiveness of the program, in our mind is a miracle," Kozak said.