Dairy cooperatives like the latest congressional proposal on dairy policy, but the National Farmers Union is opposed.
By MARC HELLER
Times Washington Correspondent
WASHINGTON — The odds of passing significant changes in dairy policy before the 2012 Farm Bill appeared to take a hit when the National Farmers Union this week said it won’t support a proposal by Rep. Collin C. Peterson that resembles a plan from dairy farmer cooperatives.
“The current proposal would not provide a safety net for all dairy farmers, particularly family-sized operators,” said the president of the NFU, Roger Johnson, in a statement. “A fundamental problem with this proposal is that it appears that the largest farmers will reap the greatest benefits at the expense of smaller family farms.”
Mr. Peterson, D-Minn., the ranking Democrat on the House Agriculture Committee, proposed a package of reforms to replace a subsidy that farmers are paid when milk prices fall below a federal target. The plan also eliminates the dairy price support program through which the government buys excess dairy products.
But the chairman of the committee, Rep. Frank Lucas, R-Okla., has said he will not push forward with changes in the dairy program ahead of the Farm Bill unless the industry is unified.
The NFU, which has little membership in New York but is a significant player in the Midwest and some Eastern states, took issue with Mr. Peterson’s provision for supply management and objected to dismantling the price support program and the subsidy program, called the Milk Income Loss Contract.
The organization’s board of directors voted on the position earlier this week. The NFU said a supply management system, which is supposed to discourage farmers from expanding, should be based upon a fixed base of milk production for each farmer. That, combined with the MILC program, would “provide a fiscally responsible way to manage risk in dairy production at minimal or no cost to the American taxpayer,” the organization said.
And while Mr. Peterson’s program calls for an assessment to be collected on milk when profit margins are low — a disincentive to produce more milk — the NFU called for a refundable assessment to be charged on milk at all times, along with an increase in the support price.
The NFU’s objections are not a surprise, as the organization had not been supportive of the proposal that Mr. Peterson used as his guide, the Foundation for the Future plan from the National Milk Producers Federation.
The NFU voiced its objection days after Mr. Peterson said he has never seen the dairy industry as united as it is on the need to change federal milk policies. Despite the safety net in place, severe price drops two years ago have strained farmers and sent prices well below the cost of production.
Mr. Peterson’s measure is only a draft at this point, as he considers putting it into legislative language and draws comments from colleagues.
Rep. William L. Owens, D-Plattsburgh, said in a telephone interview that he has studied the draft, but has not made up his mind whether to support it. The north country is home to several dairy processors as well as farmers, he said, and he is looking for real-life examples of how the proposal would affect farmers and the plants where they sell milk.
