Congressman Peterson proposes dairy farm safety net

U.S. Rep. Collin Peterson from Minnesota has come up with a plan to create a safety net for dairy farmers as Congress begins to look at reform possibilities in anticipation of next year’s farm bill.

Tom Scheck’s daily MPR digest noted the story on Peterson, which was published by the Burlington Free Press in Vermont.

Peterson’s draft legislation would help protect dairy farmers’ profit margins, rather than adjusting to changes in milk prices, the story said.

“The proposal creates a strong safety net that will provide the support all sectors of the diverse industry need during tough times,” Peterson said.

In the draft legislation, he proposes:

  • An insurance program that would provide a floor for producers’ profit margins and would take into account the difference between milk prices and the cost of feed.
  • A simplified pricing system for milk.
  • A “Dairy Market Stabilization Program” that would discourage dairy farmers from overproducing by reducing payments when the economy slows. Also called “growth management,” the idea is opposed by dairy processors, but some Vermont farmers and the state’s congressional delegation have rallied behind it.

This would replace the Dairy Price Support Program, which allows the government to purchase dairy products and store them for future use, and the Milk Income Loss Contract (MILC) Program, which compensates dairy farmers when domestic milk prices drop below a certain level.

The National Milk Producers Federation, which represents most dairy producers, seems to be on board:

“This is a long-anticipated and very welcome next step in the process of upgrading dairy policy to better provide farmers with protection, stability, and the opportunity for growth,” said Jerry Kozak, president and CEO of the group.

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