Wisconsin Ag Connection - Farm Bill Legislation Moves Forward with DSA Dairy Policy

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Farm Bill Legislation Moves Forward with DSA Dairy Policy
Wisconsin Ag Connection - 06/08/2012

The Senate version of the 2012 Farm Bill moved another step forward after 90 Senators voted in favor of bringing the measure to the floor for further consideration on Thursday. The policy will now proceeds to the full Senate floor for debate and amendments, a process that could take several weeks before a final vote is taken.

In its current form, the farm bill includes the controversial Dairy Security Act, which is a voluntary margin protection program being endorsed by the National Milk Producers Federation. They say the DSA is a good solution to fix the nation's faulty dairy policy because it provides a safeguard for farmers against disastrously low margins, such as those in 2007 and 2009 when low milk prices and high feed costs put many producers out of business.

"The dairy title contains a better safety net for farmers in the form of the Dairy Production Margin Protection Program, which offers them a basic level of coverage against low margins, as well as a supplemental insurance plan offering higher levels of protection jointly funded by government and farmers," said NMPF President Jerry Kozak. "Those who opt to enroll in the margin program will also be subject to the Market Stabilization program that asks them to reduce milk output when margins are poor."

But a Wisconsin-based dairy group is still very vocal in their opposition to the DSA provision. Dairy Business Association President Jerry Meissner penned an editorial earlier this week, saying while the act makes several positive advances, including the elimination of antiquated dairy programs, the creation of margin insurance with a poison pill known as supply management is a 'step in the wrong direction.'

"Under the proposed Dairy Security Act, farmers participating in the risk management or margin insurance portion of the program must participate in the supply management program," said Meissner, who is a Clark County dairy producer. "Wisconsin farmers will be mandated to limit their milk production, reducing revenues and de-stabilizing our state's consistent milk supply. This program also places the USDA and the federal government directly between processors and producers, an even more problematic issue."

He says the concept of regulating a farm's output is 'economically dangerous' and said attempts by Congress to implement similar programs in the 1980s ended in failure despite their intended purpose.

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