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Gillibrand: dairy farms need help now

March 15, 2011

U. S. Senator Kirsten Gillibrand from New York doesn’t want to wait. She wants it now.

Gillibrand announced a comprehensive plan to provide immediate support for New York dairy farmers who are facing an imminent crisis, not next year, not tomorrow but today.

“We simply cannot wait until the Farm Bill of 2012 to find solutions. We need to address this crisis now,” she said.
After hearing from dairy farmers at six agricultural listening sessions across New York States in preparation for the new Farm Bill, the senator concluded that farmers cannot wait for solutions.

First on Gillibrand’s list is the overhaul of the milk pricing system with fair, competitive pricing for New York dairy producers and making the opaque pricing system more transparent.

“What is needed is to fix a system where dairy farmers often pay more to produce their products than they make from selling them,” she said.

There was a time when something called “parity” and the cost of production were the basis for establishing milk prices, giving farmers and their families a decent living. That all ended in 1981 when President Ronald Regan removed parity pricing and replaced it with marketing pricing, which was an open door for manipulation and corruption, according to many milk industry experts.

Parity was the index for determining price supports based on a relationship of farm prices to prices for non-agricultural goods and services.

Since it was adopted in 1996, the current system of end-product pricing has contributed to increased volatility in the prices farmers receive for their milk. Gillibrand wants to introduce alternative measures of pricing, such as “competitive pay” pricing. This would base the price of milk on a survey of prices paid to farmers for milk used in cheese production in a competitive market.

“A competitive pricing system would benefit New York because of our proximity to competitive markets and would be a more transparent and direct way of pricing milk based on the actual price that farmers receive,” she said.

Another item high on her list is opposing the expected cuts to the federal Milk Income Loss Contract (MILC) program.. Gillibrand calls the MILC program, which pays farmers when the price of a hundredweight of milk falls below $16.45, “a safety net” needed because farmers are struggling to make ends meet. MILC is not popular with all farmers, however, because it
doesn’t go far enough.

Gillibrand is introducing the “Democracy for Dairy Producers Act,” which would establish a floor price for milk that would include the farmers’ cost of production.