Major Issues

2002 Farm Bill

Highlights of the 2002 Farm Bill for Vermont Summaries prepared by the Office of Senator Patrick Leahy National Dairy Program VT Delegation Summary (5/2/02) Program Details Non-Dairy Commodities (corn, soybeans, etc.) Specialty Crops Organics Conservation Nutrition Rural Development Forestry Research Energy Disaster Assistance

Dairy NEW!   National Dairy Program:  Under the National Dairy Program, dairy farmers across the country will receive monthly payments B when fluid milk prices fall B nearly identical to what New England producers received under the Northeast Dairy Compact.  All farmers in Vermont will be eligible for these payments.  The program is authorized through Sept. 30, 2005.  *         Like the Compact, whenever the federal minimum price for fluid milk in Boston falls below $16.94 per hundred weight, participating dairy farmers will receive a payment.  The national dairy program will pay producers 45 percent of the difference between $16.94 and the Class I fluid milk price in Boston.  *            Like the Compact, payments will be made on a monthly basis and will fluctuate with milk prices; no payments will be made when the fluid milk price in Boston is $16.94, or higher.  Under this new program, the U.S. Department of Agriculture's Commodity Credit Corporation, not milk processors, will make the payments.

*         Producers should begin receiving payments under this new national dairy program early this fall. USDA is required to begin signing up farmers to participate in the program not later than 60 days after the new farm bill is signed into law.  As under the Compact, all producers will receive payments on a monthly basis: USDA is required to pay producers not later than 60 days after the end of each month for which a payment is made.

*         A significant feature of the new national dairy program is that it will be retroactive, covering market losses due to low prices since Dec. 1, 2001.  On that date, there was a devastating drop in the price for Class I fluid milk.

*         Whereas the Compact made payments to producers based on the amount of milk marketed in the six-state Compact region, the national dairy program will make payments based on milk marketed in any of the 50 states.  However, each producer will be able to receive payments on no more than 2.4 million pounds of production per year.  Only milk marketed during a month in which a payment is made will count toward that total. 

*         In a new provision added by the House of Representatives negotiators at the final conference meeting, the 2.4 million-pound cap will apply to each dairy Aoperation@ as that term is defined under the Dairy Market Loss Assistance Program guidelines.  Each typical farm represents at least one Aoperation@ and could represent two or more operations.  (Note that USDA Notice LD-505 defines dairy Aoperation@ as Aany person or group of persons who as a single unit produce and market milk commercially produced from cows and whose production and facilities are located in the United States.@)  

*         The bill also re-authorizes the milk price support program under which the government purchases powdered milk, cheese and butter offered to it at the equivalent of $9.90 per hundredweight, re-authorizes the Dairy Export Incentives Program (DEIP), and requires importers to pay the dairy research and promotion program assessment, and authorizes a new Johnes disease research initiative.