Wisconsin Ag Connection - DBA: New Government Numbers Show DSA Costing More

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DBA: New Government Numbers Show DSA Costing More
Wisconsin Ag Connection - 03/06/2013

A Wisconsin farm group that has been very vocal about its opposition to the dairy supply management program being proposed in the new farm bill says they have new information about what the Dairy Security Act will cost taxpayers. According to Dairy Business Association Director Laurie Fischer, new figures from the Congressional Budget Office show that implementing the DSA will now cost an additional $441 million dollars over ten years.

"The Dairy Security Act supported by the National Milk Producers Federation has numerous unintended consequences as evidenced by the new cost estimates prepared by CBO," Fischer said. "NMPF has always told farmers that the supply management part of the DSA is necessary to keep costs down, but clearly that is not the case now."

The DSA aims to eliminate the current dairy price support program and replace it with a safety net that would pay producers a settlement when milk prices fall below profitable levels. The NMPF has long contended that the program is a good solution to fix the nation's faulty dairy policy because it provides a safeguard for farmers against disastrously low margins.

But the DBA says the plan would force participants to limit their production if milk prices get too low, thus causing even more financial harm to producers during tough times.

Meanwhile, Reps. Bob Goodlatte of Virginia and David Scott from Georgia have proposed a margin insurance program that is not tied to supply management requirements. Fischer says her group supports that measure because it would cost $100 million less than DSA, while providing a more meaningful dairy safety net program.

"Like other agricultural insurance programs, Goodlatte/Scott encourages farmers to take a proactive approach to managing their risk and to share in the costs of such a program, rather than subjecting the industry to supply management," Fischer said.

The DSA proposal was included in the Senate's version of the farm bill last summer. But when the House failed to act on their own farm bill proposal before the end of 2012, Congress decided to extend the previous farm bill for nine more months instead of making drastic changes to how milk and dairy products are priced.

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