Dive Summary:
- The U.S. House of Representatives is set to vote this week on a new dairy program which would eliminate price supports and empower farmers to buy insurance that pays them when the difference between milk prices and feed costs decreases.
- Farmers who take part in the voluntary dairy program would also have to take part in a market stabilization program that enforces decreases in production when prices drop due to surplus.
- The program seeks to disrupt the vicious cycle of decreases in milk prices causing farmers to produce more, which then creates a surplus and reduces prices even further, an event which occurred in 2009 and caused many dairy producers to go out of business.
From the article:
All involved in lobbying on the amendment say it has been a tough issue to explain to members, primarily because most don't know much about dairy policy. The House has around 200 new members since the last farm bill was passed in 2008, and many urban and suburban lawmakers don't have much interest in dairy beyond the price of a gallon of milk.
Both sides have used that lack of knowledge to make their case in simple terms. Opponents say that because the stabilization program is designed to help dairy farmers sell their product to companies at higher prices, consumers would be paying more for dairy products in the grocery store. The bill's supporters say the new program would have little effect on grocery store prices but would keep taxpayers from having to shell out more in dairy insurance.