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Push for DMSP Dies in Latest Farm Bill Draft
Wisconsin Ag Connection - 01/17/2014

The idea of passing a supply management provision in the dairy title of the next farm bill does not appear to be a possibility any longer. On Thursday, House Speaker John Boehner said he would not bring the farm bill up for a vote if it included the Dairy Market Stabilization Program, which he describes as 'Soviet-style' legislation. Farm bill conference committee members instead began hammering out a different plan that would put adjustments on the proposed margin insurance program of the Dairy Security Act by raising the plan's premiums if milk supplies surpass the need for demand, while dropping the payments that get sent to farmers.

Reports say Collin Peterson of Minnesota, who serves as the ranking member of the House Ag Committee, responded to that news by saying it's not what he wanted, but that he would not hold the bill up over it.

"If you have a $6 per hundredweight margin and the margin goes under for more than two months, then you'd be getting payments," Peterson told reporters Thursday while explaining how a new provision would work. "But if you increase production, your payments would be reduced."

The DePere-based Dairy Business Association has been one of the biggest critics of the supply management clause, which would force producers to cut milk production in over-supply situations. DBA Director Laurie Fischer told Wisconsin Ag Connection that actual farmers may have made all the difference in bringing the long battle over the issue to a close.

"We know that over the past several days, many producers began contacting the members of the conference committee directly and expressing their opposition to a supply management concept," Fischer said. "Although we see this as a victory, we have a long way to go. The House and Senate will still need to pass the farm bill before anything becomes official."

The National Milk Producers Federation--which helped draft the DSA with the DMSP attached--released its own statement Thursday evening, saying the Speaker's threat to kill the bill containing the market stabilization program means an end to a four-year effort to bring the policy to fruition.

"We are now engaged in discussions with agriculture committee staff on an alternative approach to creating a dairy safety net that would contain inducements to help achieve a supply-demand balance and prevent catastrophic milk price collapses like we experienced in 2009," said NMPF President Jim Mulhern. "At this point, it is conceivable that an alternative mechanism could be developed, relying upon adjustments to the program's margin insurance payout structure and participant premium rates, among other options."

Mulhern stopped short of saying his group would support the bill until more details are released; though he did say any program that does not effectively address the needs of its members will not have NMPF's backing.

Meanwhile, Rep. Peterson confirmed that the dairy title would not include price supports or an extension of the Milk Income Loss Contract Program, but there may be an increase in the government's ability to buy milk in certain market conditions. He also noted that rules on payment limits for crop producers are still being negotiated in the conference committee.

Lawmakers hope that the House leadership will have a final conference report on the floor by late-January after Congress takes a break for Martin Luther King Day.

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