December 2006
Word Version
[0]

Jerry Kozak
President/CEO

Elections are like tea leaves; you can infer many things upon their careful examination, even though they are often murky and open to interpretation.  But one thing has been made clear by what happened earlier this month: the dairy industry needs to be prepared to contribute to the development of the next Farm Bill, and we need to be ready to do so sooner rather than later.

In the past weeks, the incoming chairmen of both the Senate and the House Agriculture committees, Sen. Tom Harkin and Rep. Collin Peterson, respectively, have made clear that they will have their committees work on the next farm bill in the next year. Previously, there had been some conjecture that Congress would simply extend the current bill another year or two. But it’s now plain that both committee chairs will use their newfound leverage to get to work after January. For those in the dairy sector, it will make for a busy winter.

Actually, from NMPF’s standpoint, we did a great deal of preparatory work already this past year.  NMPF held three regional listening sessions, our Dairy Producer Conclave meetings, earlier this year in California, Illinois and Virginia.  We invited hundreds of dairy farmers from dozens of states, representing many different organizations, to discuss policy issues of concern to them. 

What resulted from that process was a clear manifesto for the dairy producer community heading into the next Farm Bill (you can find a copy of the Conclave results at www.nmpf.org [1]). It’s clear that farmers want and expect that the government will maintain some form of economic safety net for dairy producers. It was also clear that farmers understand that we – and the Congress – may have to entertain some alternative ideas about the nature of that safety net. 

When we held our Conclave meetings last winter, there was also much speculation that the imminent passage of a Doha agreement in the World Trade Organization would circumscribe our future farm policy options. It now appears that the WTO is moribund, and it’s far more likely we’ll see Congress pass the next Farm Bill long before it agrees to another WTO agreement. But even without a WTO agreement as a potential challenge to the status quo, we still need to reexamine where we may want to make changes as we transition toward the future.

NMPF’s Conclave process made it clear that while farmers are generally comfortable with the status quo, they are also willing to consider some other options. That's why our organization is examining the pros and cons of different aspects of safety nets for farmers and cooperatives. We’re using an economist outside of the dairy sector to examine different policy options.  Regardless of the timing of the next Farm Bill and the resolution of the Doha round, I believe that it is important that we position ourselves for the future, which entails consideration of a range of policy modifications.

Currently, of course, we have the venerable price support program, along with a relative newcomer, the Milk Income Loss Contract program, which was first created in the 2002 Farm Bill. Both are generally popular, although both have some vocal critics. Will both be reauthorized as part of the next Farm Bill?  That is something we in the producer community must answer as Congress begins to weigh different policy options going forward.

Earlier this month at the NMPF annual meeting in Las Vegas, I asked our members to remain open about the policy options that NMPF may pursue in the future. We will need to have further dialogue within our organization, and within each of NMPF’s member cooperatives, in the coming months. We need to maintain a unified front and a uniform message when we deal with our elected officials on farm policy. United, we can get a great deal accomplished, as we did with the 2002 Farm Bill. But if we let individual or regional differences prevail, we will not be successful in our efforts.

Just as 2007 will bring transition to new leadership and some new philosophies on Capitol Hill, I think we have to prepare for transition in farm programs next year as well. Producers across the country should seriously consider looking with a fresh set of eyes at whether our current safety nets truly are the best policies to serve our needs and goals. 

This effort should be undertaken not to please USDA, foreign countries, or the processor community – nor should it be the result of budget constraints or other political considerations – but rather our goal should be creating the strongest set of dairy programs possible that would allow producers and cooperatives to be more competitive, while better addressing the evolving needs of our producer community as a whole. It’s now time for another cup of tea, and to roll up our sleeves and get to work.