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Dairy Farmers Urge Congress to Reject Supply Management
April 26, 2013

The Dairy Business Association is urging Members of the House Agriculture Committee to support the bi-partisan compromise dairy legislation offered today by Reps. Bob Goodlatte (R-VA) and David Scott (D-GA).  The Goodlatte-Scott compromise offers dairy producers margin insurance protection without requiring them to accept milk check deductions that would be collected by USDA.  The bill also doesn’t require dairy farmers to pay new administrative fees to USDA, unlike what was proposed by the House Agriculture Committee last year.

The Goodlatte/Scott dairy bill provides margin insurance on its own, similar to how other commodities are treated in Title 1 of the Farm Bill.  Catastrophic margin insurance is offered for free up to 4 million pounds of production annually, and is offered at higher levels to all farmers without any supply management conditions.  The margin insurance will also allow farmers to update their milk production every year they choose to participate in the program.

It mirrors all of the provisions of the Dairy Security Act, except the supply management provision which forces the government to limit the amount of milk individual farmers can sell as well as intervene in the marketplace to buy dairy products.
“As a dairy farmer, I think we need this important risk management tool to manage price volatility in both milk prices and feed costs. By rejecting supply management, and endorsing margin insurance, Representatives Goodlatte and David Scott have found a true compromise,” said DBA president and farm owner Jerry Meissner, president of the Board of Directors for the Wisconsin Dairy Business Association, and owner of Norm-E-Lane, Inc., a 2,000-cow operation near Chili, WI. “There is more than enough evidence that the stand-alone insurance program will work and be affordable for us. Without supply management, we don’t allow the government access to payment deductions from our milk check.”
A recent report, “Shared Potential, Shared Concerns and Open Questions,” found the Goodlatte-Scott margin insurance without supply management to be “effective in providing catastrophic risk insurance” for stable and growing dairy farms.
“Dairy farmers want a safety net, to protect them through tough times,” said Laurie Fischer, Executive Director of DBA, “and they do NOT want government interfering in their businesses or in milk markets.  Goodlatte-Scott accomplishes both of those goals for them.”
The Chairman and Ranking Member of the House Committee on Agriculture proposed to include dairy supply management in the extension of the 2008 Farm Bill.  The proposal was rejected by both House and Senate earlier this year.
“By dropping the supply management program, the Goodlatte Scott dairy bill represents a true compromise that is broadly supported and won’t stand in the way of moving the 2013 Farm Bill forward,” added Fischer.  “Our dairy farmers should be able to produce as much milk as they can, and to be allowed to grow without supply management penalties, just like the rest of U.S. agriculture.”

About DBA The Dairy Business Association is an industry organization comprised of dairy producers, corporate as well as allied industry supporters. DBA promotes the growth and success of all dairy farms in Wisconsin by fostering a positive business and political environment. For more information about DBA, please visit our website at www.widba.com.



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