September 7, 2011

 

US congressman attempts to amend dairy reform plan

 

 

Rep. William L. Owens, D-Plattsburgh, is searching for a key element to modify the existing dairy reform plan which raises question whether his efforts will be paid off.

 

Owens said last week he wants to see if some farmers can be exempted from milk production limits in the proposal if they have a long-term supply contract with a milk processor, perhaps for three to five years.

 

He said he has discussed the idea with Rep. Collin C. Peterson, D-Minn., and ranking Democrat on the House Agriculture Committee, who has said the panel will deal with that issue.

 

Owens is a member of the committee that will draft changes to dairy policy either this year or as part of the five-year farm bill next year. The farm bill outlines most farm, nutrition and rural development programmes.

 

The market stabilisation programme is part of a comprehensive reform package Peterson released in draft form earlier this summer, based on a proposal from the National Milk Producers Federation. The programme is triggered when the margin between milk prices and feed costs narrows to a certain point; farmers then will be paid on just 98% of their average milk marketing for the past three years, a strong signal to cut production, proponents say.

 

Owens' idea, which he said is just a concept, is to free farmers from that aspect of the new system if they have an extended supply contract. With such an arrangement with a processor, farmers have already achieved their own market stability, Owens said.

 

A spokesman for the National Milk Producers Federation did not immediately return an email seeking comment, but the International Dairy Foods Association, representing milk processors, opposes any form of government-generated supply management.

 

"Stabilisation is the equivalent of a Pontiac Aztec and redesigning the mirrors is not going to change the concept," said Jerry Slominski, the IDFA's senior vice president for legislative affairs and economic policy, through a spokeswoman.

 

On the other hand, Slominski said Owens's idea appears to endorse risk management tools such as longer-term supply contracts, which the IDFA endorses.

 

Peterson's proposal does not yet have an endorsement from the committee's chairman, Rep. Frank Lucas, R-Okla., but Owens said there may be signs of the draft making some progress this year, ahead of the farm bill.

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