Release Date: A
pril 2007
Word Version
Farm Bill Needs Team of Big Ideas
Jerry Kozak
President/CEO
The process of crafting a national farm bill is not unlike another prominent national ritual that everyone knows as March Madness. The annual NCAA basketball tournament subjects the best 64 teams in the country to a series of progressive tests that culminates in a championship game to anoint the top team in the land. The winner is often not the team with the best overall record, but the one that can focus on each step of the process, survive that game and advance to the next round.
In the same fashion, developing a farm bill is a winnowing process. Ideas and policies must be debated – both within the dairy industry, and ultimately by Congress. The ideas that generate the most amount of buzz at the outset may not be the ones left standing once the bill is finally signed into law.
As many are now aware, NMPF has fielded a package of proposals for the 2007 Farm Bill. Think of our idea lineup as a team – some proposals are bigger or better known than others, but each is a critical component to the outcome of the game. Our ideas were recruited over the past year from throughout the dairy producer community. We had our Conclave meetings in 2006, where different concepts were scouted and scrutinized. Our Economic Policy Committee last year served as coaches, putting those ideas to the test to achieve the balanced team we wanted. In the first week of March, the NMPF Board of Directors approved this farm bill package, in effect devising a game plan for our organization and its members heading into the ultimate competition.
As a result of all this preparation, we feel we have the best series of players in the game – big ideas that will be impactful in the coming months.
First, we are revising the dairy price support program. Historically, Congress has told the USDA to achieve a $9.90/cwt. milk support price, by giving the agency discretion to buy storable products at varying price levels. Unfortunately, as we've seen many times, the monthly classified prices have dropped below that level – even below $9 earlier this decade – because of USDA's approach to purchasing and selling certain products. So, what we are fielding is a better system: a dairy product price support program, where Congress sets the level of support for each product independently. Under this new idea, USDA will continue to provide a basic safety net as before, while achieving a true minimum support of farm-level prices.
NMPF is also, for the first time, endorsing a familiar concept to help deal with market volatility in both milk and feed prices: a reliable & consistent direct payment.
Our producer security program will feature regular payments to producers, with an expenditure level similar to the payments made by the current MILCX program. But the payments would be based on historic, not future production, and they would also be decoupled from price – meaning they would be predictable. Part of the challenge that dairy producers will face in coming years is that while milk prices may be higher, so too will input costs (fuels and feed grains) be higher than average. A predictable payment system will help farmers grappling with unprecedented pressures from higher costs of production. Agriculture Secretary Mike Johanns has called for the next farm bill to be predictable, and we think our producer security program achieves that goal better than other game plans.
While the product price support and milk security programs may be viewed by some as the twin towers of our policy team, we've got some other equally great contributors on the court along side them.
In the area of conservation and renewable energy, we think the Farm Bill is the right place to push for credits for renewable energy, specifically, for producers who want to invest in not only manure digesters, but also some nutrient management efforts that can capture the biofuels potential of animal waste. This is a win-win scenario that helps generate electricity from a natural source, while also improving the environment. Likewise, we are pushing for more assistance in the Environmental Quality Incentives Program, and the Conservation Security Program.
A stellar performer on our idea team is the nutrition title of the farm bill. We want to build on dairy's prominence in USDA feeding programs, with an additional focus on lowfat and nonfat milks and yogurts in schools, and in the WIC program. We also don't want to take our eye off the ball of animal health: we need continued support for programs that prevent the spread of BSE, Johne's, tuberculosis, brucellosis, and other dangerous animal health concerns.
As part of our dairy team, we also want to address the issue of risk management. NMPF's proposal includes a program that would allow producers to forward price their milk in Classes II, III and IV, for the duration of the farm bill. The USDA milk market administrators would enforce the terms of the contracts.
Last but not least, we are finally going to slam dunk the checkoff assessment on imported dairy products. We thought we scored big with that in the 2002 Farm Bill, but a timeout resulted in it never being implemented. It should be an easy two points in this bill.
We have a deep bench of other additional ideas for the Farm Bill. More will be revealed as the tournament of ideas develops. We look forward to matching our players with those on other teams, because we feel that our comprehensive approach to the game of national farm policy is battle-tested, and has the ability to go the distance. We are ready to play.
