DBA Supports Farm Bill Amendment to Drop DSA

By CnAgri2012-07-11 19:59:39 Print

One of the amendments that the House Agriculture Committee will consider to its version of the farm bill on Wednesday is a proposal to scrap the controversial market stabilization program for milk pricing. The amendment was proposed this week by Rep. Bob Goodlatte of Virginia and David Scott from Georgia, which would provide a safety net for dairy producers without requiring them to participate in a supply management program, such as the Dairy Security Act that the Senate's bill included.

Citing research by Mark Stephenson, PhD, a dairy policy analysis at the University of Wisconsin-Madison, the Dairy Business Association says this alternative solution will be a better option for the industry.

Dr. Stephenson's report said the plan drafted by the National Milk Producers Federation would sweep away the existing Dairy Price Support Program and Milk Income Loss Contracts. But he says the Proposed Margin Insurance Plan would have done more to help the industry over the past six years when dairy prices went through a market roller coaster.

As expected, the NMPF released a statement urging members of the committee to reject the amendment. CEO Jerry Kozak says the change 'guts the dairy reforms that farmers have worked so hard in the past three years to create' because it would tear a hole in the insurance safety net offered in the original plan.

Kozak argues that the farm-level safety net under consideration offers dairy farmers a basic level of margin protection at no cost, while offering them the option of purchasing supplemental margin insurance to cover a wider gap between the cost of feed and the milk price.

"Those who choose this voluntary program would be covered by the market stabilization element, encouraging them to temporarily cut back milk production when margins are poor," he said.

The DBA has long opposed the DSA solution because it would limit how much milk a producer could sell if prices fall below certain levels.