Reps. Bob Goodlatte, R-Va., and David Scott, D-Ga., Thursday re-introduced legislation to eliminate current dairy programs by replacing them with the "Dairy Freedom Act," getting in front of dairy program discussion in farm bill talks.
The DFA would establish a dairy margin insurance program to replace the standing Dairy Product Price Support Program, the Milk Income Loss Program and the Dairy Export Incentive Program.
Notably, the plan does not include the controversial Dairy Market Stabilization Program, which has been dubbed "supply management" by many opponents due to a provision in the plan that requires farmers to idle milk production or take a milk check deduction to drive supplies down and farmers' prices up.
The program was offered last year as part of a larger Dairy Security Act offered by Collin Peterson, D-Minn., and supported by the National Milk Producers Federation.
The latest offering by Goodlatte and Scott is a similar program to the DSA, however it does not include the DMSP. Goodlatte said Thursday that DMSP – or "supply management" – is not included in his plan because it does not conform to the free market system.
"Supply management is contrary to the goals of limited government, economic growth and free markets. A supply control program puts federal government bureaucrats in the middle of market decisions by manipulating dairy prices, instituting dairy production quotas, and penalizing consumers," Goodlatte said. "With budgets already stretched thin, higher milk prices would negatively affect American families, food manufacturers, retailers, and restaurants. The federal government has no business intervening in this market. "
The International Dairy Foods Association, representing milk processors, supports the legislation, noting that a DSA program has the potential to limit jobs and curb exports due to lower production.
However, the National Milk Producers Federation, which supports the DSA and DMSP, says the DFA program doesn't offer any mechanism to control the milk supply, thereby bringing an abundant supply of inexpensive milk to the hands of processors – doing nothing to improve the milk price offered to producers, who have been struggling with low margins.
"Goodlatte and Scott's misnamed Dairy Freedom Act is nothing more than an unacceptable attempt by dairy processors to assure themselves access to a sea of taxpayer-subsidized cheap milk. Congress rejected this approach last year, and should do so again this year," said Jerry Kozak, president of the National Milk Producers Federation.
During the last Farm Bill talks, both the House and the Senate Agriculture Committees approved the market stabilization program in the Dairy Security Act. Goodlatte and Scott offered an amendment challenging the stabilization program to the 2012 Farm Bill, but it was defeated in the House committee 29-17. The DSA, however, was not included in the extension of the 2008 Farm Bill.