House Democrat Collin Peterson of Minnesota and Idaho Republican introduced legislation that replaces dairy price supports with a voluntary risk management program that insures farmers against extremely low margins between milk and feed prices.
Under their Dairy Security Act, farmers who participate in the government-subsidized margin protection program would be required to temporarily curb milk output whenever supply and demand fall out of balance.
Peterson says the legislation addresses the realities of today’s dairy market….
“The current system is out-dated, out-moded, does not provide a safety net when it’s needed that’s adequate to address the situation. It’s also not a good system for managing the oversupply situation that happens from time to time.”
Peterson had hoped to move the dairy legislation through Congress prior to the Farm Bill debate. He says the “super committee” debt reduction process has clouded that timeline.
The Congressional Budget Office, according to Peterson, has reviewed the reform package and determined it would saves taxpayers 131-million dollars over ten years….
“Which we think will help us to get support in however this process is going to move forward. That’s one of the things that I’ve insisted on is that this bill produce budget savings.”
Peterson says he’s expects a healthy majority of dairy farmers to participate in the more market-oriented safety – even after changes were made to tie margin protection to supply management….
“This is going to be a decision that farmers make as to whether this protection is needed and whether they want to participate. When we had the CWT we had about 70% participation, I assume we’ll have that kind of participation or higher with this as well. So, this is something that’s brought up more support.”
To that point, Peterson points out that the Dairy Security Act has been endorsed by House lawmakers in all major dairy-producing regions of the country – most notably California and the Northeast.