June 26, 2013 —
On June 20, the U.S. House of Representatives voted on the House version of the 2013 Farm Bill. It received a solid trouncing, going down in defeat, 195 to 234. Obviously, the House leadership is challenged with a House majority that defies being led and with an inability to build consensus. A dose of cluelessness, too, as both Speaker John Boehner (R-OH) and ranking member of the House Agriculture Committee, Collin Peterson, (D-MN) were convinced they had the necessary votes for passage until the vote was actually underway. Blindsided by botched vote estimates, they were dumbfounded watching the best chance for a much anticipated 2013 Farm Bill go down the pipe.
Their big question now is whether to try to rally support (if that is even possible) and recycle it, or just re-up the currently extended 2008 Farm Bill when it expires on September 30. All concerned are licking their wounds and crafting poisonous rhetoric to hurl at each other. Sadly, in the U.S. House, this is what passes as business as usual.
Before the debate, Peterson prophesied the 2013 Farm Bill would be the last of its kind. Given current realities, the 2008 bill will likely hold that dubious distinction. The urban-rural, bi-partisan coalition that scratched each others’ backs on food stamp and farm policy issues for several decades has come unraveled. For better or worse, consensus on comprehensive national farm legislation may now be out of reach in the U.S. House.
Small farm dairymen should lose little sleep over all this; the bill’s dairy provision, the Dairy Security Act, was weighted heavily in favor of large factory-style dairy operations. U.S. dairymen need a stable, fairly calculated price for their milk, not a federally subsidized dairy margin insurance boondoggle that will merely cover losses.
Dairy margin insurance schemes, served up by the National Milk Producers Federation lobbying for large dairy co-operatives, are no solution for dairy farmers. They don’t address the underlying root of the problem: a flawed USDA Milk Price Formula. The current formula relies on data collected on cheese transactions from the Chicago Mercantile Exchange. There, less than 1% of total U.S. milk production sets prices for the remaining +99% in a process routinely manipulated to advantage by major milk buyers.
While milk processors should have some say in what they pay for milk, they should not have total say. Since the Reagan administration, U.S. dairy farmers have been systematically short changed on the value of their milk. Before then, when a consumer spent a dollar on dairy products 53 cents of that dollar went to the farmer; currently this has shrunk to about 25 cents, yet proportionately, it costs no more to process or retail dairy products.
A reformed Federal Milk Price Formula—indexed for current cost of production and reflecting prices paid by consumers—would be better for all concerned. Then USDA would referee and enforce carefully crafted rules designed to maintain a level price-discovery playing field between farmers and processors.
The nutritional value of dairy products to the national diet is essential. It is grossly unfair to expect dairy farm families to labor below minimum wage, often no wage at all, to keep dairy product prices low in supermarkets. Taxpayer money should not have to subsidize consumption; consumers pay enough for dairy products. The money is in the marketplace; it simply needs to be fairly distributed to reflect the essential contribution of dairy farmers.
Responsibility for economically priced dairy products calls for equal effort from all involved and should not be arbitrarily dumped on the nation’s dairy farmers while dairy processors and grocery retailers continue to chuckle all the way to the bank.
[Wilson, 66, has retired from 40 years of dairy farming on a small hill farm in New York’s Chautauqua County. He is a regular contributor to The Milkweed, a national dairy industry monthly.]