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Hurdles Loom Ahead
For National Dairy
Program
WASHINGTON (Fri., Nov. 16) – Sen. Patrick Leahy says a battle
over the national dairy program is almost certain when the Farm Bill
reaches the U.S. Senate Floor after Thanksgiving.
Leahy succeeded in adding the national dairy program, modeled on
the Northeast Interstate Dairy Compact, to the Senate's version of the
Farm Bill on Thursday before the Senate Agriculture Committee approved
the bill. Leahy is a senior member of the committee. Leahy and the
rest of Vermont’s congressional delegation, along with others in
Congress from other New England states, have pushed for and would
prefer a renewal of the Compact’s charter, but that has proven
impossible in this session of Congress.
Major dairy processors who fought the Northeast Dairy Compact also
oppose the national dairy plan, and Leahy said he expects well-funded
efforts by the processors to remove the plan during the upcoming
Senate debate.
"Processors have spent millions trying to kill our regional
compact, and they’re digging even deeper into their pockets to kill
this national plan," said Leahy.
Leahy's plan -- similar (but not identical) to the plan advanced by
Congressman Bernie Sanders and Congressman Dave Obey during House
consideration of the counterpart Farm Bill -- offers counter-cyclical
income support for dairy farmers nationwide to stabilize the
production, price and marketing of milk and other dairy products.
Though the Sanders-Obey amendment was not accepted by the House, it
garnered more support than expected.
Like the Sanders-Obey proposal, Leahy's plan uses an over-order
premium mechanism, modeled on the mechanism used in the Northeast
Interstate Dairy Compact. The over-order premium effectively sets a
floor price that processors pay producers for fluid milk.
The Leahy plan establishes a new national minimum price per
hundredweight for raw milk used for Class I (fluid) milk. The national
Class I minimum price would take effect whenever the federally
determined Class I price mover (higher of Class III or IV price) falls
below $14.25 per hundredweight. During months when the national Class
I minimum price is in effect, processors having sales of Class I fluid
milk would be required to pay an amount per hundredweight equal to the
difference between $14.25 and the Class I price mover.
The national dairy program also establishes a new national
supplemental income protection program for dairy farmers, providing
counter-cyclical income support payments to producers of raw milk
during periods of low milk prices. Whenever the Class III price falls
below $14.25 per hundredweight, producers would receive payments under
the program.
A recent analysis of the proposal requested by Leahy, by the Food
and Agriculture Policy Research Institute (FAPRI) and performed by
Texas A&M economists, concluded that dairy producers in every
state would benefit under the program. The FAPRI analysis concludes
that, on average, Vermont dairy farmers' net income would rise between
$.35 and $.78 per hundredweight under the Leahy proposal (compared to
the average Compact payment of $.54 per hundredweight). FAPRI
determined that net farm income for a 70-cow farm in Vermont would
rise by between $9,100 and $16,800; for a 134-cow farm in Vermont it
would rise by between $10,000 and $22,400; and for a 350-cow farm
would rise by between $24,100 and $30,500. Dairy farmers in
neighboring states would receive similar benefits.
The Farm Bill also includes several other Leahy provisions,
including significant increases for the Farmland Protection Act,
authored by Leahy in an earlier Farm Bill and begun as a pilot program
in Vermont; funding for organic farmers (based on Vermont farmers’
requests for organic research and funds to help farmers transition to
organic farming); the International School Lunch program proposed by
Leahy and Sen. Tom Harkin, based on a proposal by former Senators Dole
and McGovern, to promote both education and nutrition in the poorest
regions overseas; a provision by Harkin, Leahy and others requiring
USDA purchases of $650 million worth of specialty crops (particularly
helpful to apple farmers and growers of other fruits and vegetables);
funding for integrated pest management programs that have greatly
helped Vermont apple farmers in the past; and continuation of Leahy's
Seniors Farmers Market Program that provides vouchers for seniors to
use at farmers' markets -- a program that has helped spawn several of
Vermont's farmers' markets.
During debate on the Farm Bill Leahy also has led efforts to
substantially increase funding for farmland conservation programs.
Leahy worked with Senator Harkin (D-Iowa), the committee's chairman,
to include stronger conservation provisions and greater conservation
funding than in the House-passed bill, and Leahy and Sen. Harry Reid
(D-Nev.) will offer a major conservation amendment during Senate
debate on the bill for greater conservation funding and more equity in
the bill for Northeast and Mid-Atlantic states.
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