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Dairy safety net funding at risk

TIMES WASHINGTON CORRESPONDENT
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WASHINGTON — This year's budget fights in Congress are paving the way for a struggle next year on dairy policy, and the effects are likely to linger for several years.


Spending plans the Republican-led House is crafting will put a squeeze on most farm programs and tie the hands of groups that want to see an enhanced safety net for dairy farmers, say lobbyists and congressional insiders tracking the situation.


At issue is the so-called budget baseline for farm programs, a result of spending measures Congress will consider in the months ahead.


Drastic cuts in overall spending will reduce the baseline by which the congressional agriculture committees draft a farm bill.


That's one effect of the GOP's efforts to scale back spending to levels seen in 2008. Even with Democrats in control of the Senate, House Republicans have made clear they will not accept anything less than dramatic reductions in spending.


In 2008, the main safety net program for dairy farmers — the Milk Income Loss Contract — was funded at $1.25 billion. Another part of the safety net, the dairy price support program, was funded at about $200 million.


Those levels were hard to achieve because the prior farm bill, in 2002, had not established much of a funding baseline, said Robert Gray, executive director of the Council of Northeast Farmer Cooperatives.


Now, the main lobbying group for dairy farmers, the National Milk Producers Federation, is proposing to replace those programs with margin insurance and other measures to protect farmers from low milk prices and high feed costs. The organization expects its proposals to cost about as much as the programs they are replacing, and others may save the government money, said Christopher Galen, an NMPF spokesman.


But the prospect of budget cuts — as well as the House GOP budget resolution crafted by Rep. Paul Ryan, R-Wis., last month — is clouding the picture, Mr. Gray said.


"My concern is that the Ryan budget and perhaps the Senate budget will reduce these baseline numbers, and if the elimination of the MILC program is agreed upon and the money shifted to a dairy insurance program there may be much less money available," Mr. Gray wrote in an emailed response to questions.


Until the House and Senate agree on a budget, Mr. Gray said, the funding baseline remains uncertain. But he cautioned that the MILC program already is scheduled for reductions next year.


A final budget may rest on the actions of the so-called "Gang of Six" in the Senate, Democrats and Republicans who are trying to reach a middle ground on spending reductions.


"Obviously, what I'm hoping is the Gang of Six has a plan that's rational," said Rep. William L. Owens, D-Plattsburgh, a member of the House Agriculture Committee, which will draft a bill.


Congress could do "many, many things" to trim the bureaucracy and save money, without eliminating valuable programs, Mr. Owens said.


That approach is necessary, he said, because neither the House GOP budget resolution nor a Democratic alternative, nor President Barack Obama's budget, will become the final product.


Some lawmakers, including Sen. Kirsten E. Gillibrand, D-N.Y., are pushing for the creation of new dairy programs in addition to the MILC program, which they do not want to phase out — all the more challenging in light of the budget talk.


Mr. Galen said that while the overall budget situation is challenging, and the NMPF expects less money to be available for farm programs, Mr. Ryan's budget took deeper cuts to crop programs, for instance.


While the Ryan budget resolution does not have the force of law, it does shape how the House crafts spending bills for the next fiscal year by limiting total funds available for each program.


Mr. Ryan's measure cuts agriculture programs by a total of $177 billion, from $763 billion. Some $127 billion would come not from farm programs, but from the food stamp program.

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