House Ag Committee Ranking Member Collin Peterson, D-Minn., recently proposed dairy reform based on the National Milk Producers Federation's Foundation for the Future, which attempts to solve issues preventing the current dairy safety net from functioning efficiently.
National Farmers Union President Roger Johnson says the current proposal wouldn't provide a safety net for all dairy farmers - especially family-sized operators. Johnson says it appears that the largest farmers would reap the greatest benefits at the expense of smaller family farms. That is why the NFU Board of Directors passed a resolution to address that issue.
The resolution outlines several solutions that would benefit all U.S. dairy farmers, including:
• An effective supply management program that utilizes a fixed base, which is critical to reforming the current dairy safety net. Combined with the current Milk Income Loss Contract program, such a supply management program would provide a fiscally responsible way to manage risk in dairy production at minimal or no cost to the American taxpayer;
• A refundable assessment collected on all milk at all times, not only when margins are low, and adjustment of the current Dairy Product Support Price Program to reflect an adequate safety net level;
• Implementation of a variable make allowance. When the market price is strong, the make allowance would increase correspondingly. When depressed, the make allowance would shrink so both farmers and processors have an incentive to raise milk prices; and
• Maintain the existing federal milk marketing order system with the addition of a price discovery mechanism such as a Consumer Price Index formula.
"It is encouraging that the issue of reform in the dairy industry is being taken up in Congress, but it is clear that this legislation is not the answer," said Johnson. "We will continue working with policymakers to ensure that any proposed dairy policy reforms do not exacerbate an already dire situation. We must be certain that the cure is not worse than the disease."