Dairy supports debated as work starts on farm bill

WASHINGTON — Congress takes its first step today toward the 2012 update of U.S. farm and food policies, an early start on what could be a big rewrite of programs affecting dairy farmers.

Agriculture Secretary Tom Vilsack testifies at the House Agriculture Committee today, then the committee begins a series of field hearings in Iowa, Wyoming, Idaho, Texas and other states during the next several weeks.

A hearing has yet to be scheduled in New York, but the committee typically visits once during farm bill deliberations.

Committee Chairman Rep. Collin C. Peterson, D-Minn., told reporters he wants an early start on the bill because of the big challenge lawmakers face in controlling spending, as well as the complexity of dairy policy.

Dairy policymakers "have quite an endeavor" in trying to craft a new program, Mr. Peterson said.

Citing that and other complicated issues, Mr. Peterson said, "That's another reason to kick off early."

Although the details are cloudy, Mr. Peterson's comment regarding dairy policy reflects the likelihood that programs such as the Milk Income Loss Contract — which pays farmers when prices fall below federal targets — could be abandoned in favor of measures that support higher income for farmers.

At an Agriculture Committee field hearing in Pennsylvania on Tuesday, dairy industry panelists generally agreed that the current system is not working, said Christopher Galen, vice president for communications at the National Milk Producers Federation.

Even with the MILC program, farmers have struggled to break even for the past year, farm groups say. States with big dairy industries, such as New York and California, report hundreds of farms out of business due to low milk prices.

The federation has proposed to replace the MILC program and the dairy price support program with an income protection program that would pay farmers when they lose money, rather then simply when prices are low. That idea reflects how high production costs can outpace rising milk prices, the federation has said.

"We just think it's time to scrap those and shift the resources to the income protection plan," Mr. Galen said.

However, the Agriculture Committee also is under pressure to hold down government spending. Mr. Peterson said the committee already faces the possibility of a declining baseline for farm bill funding and has no plans to ask other congressional committees for help in finding funds.

"We'll deal with whatever we have to deal with," Mr. Peterson said.

Today, Mr. Vilsack is likely to discuss which policies from the last farm bill, in 2007, are working well and which are not. Some, such as a program to encourage more alternative energy production from biomass, have barely been implemented and will need a close look, Mr. Peterson said.

"We'll have to see if it makes sense before we decide to extend it," Mr. Peterson said of the biomass program.

The Senate Agriculture Committee is moving slower, busy now with financial regulatory reform. When that committee begins farm bill work, Sen. Kirsten E. Gillbrand, D-N.Y., is likely to play a big role. As a House member, she helped draft several provisions in the 2007 farm bill.