ST. ALBANS — At a stop at a dairy cooperative in St. Albans earlier this month, Sen. Patrick Leahy, D-Vt., said he believes a Congressional conference committee is close to a compromise on a new Farm Bill, despite the wide gulf between the House and Senate versions.
“There have been a lot of quiet meetings,” said Leahy. “In those meetings there is a different feeling than we had a year ago.”
Leahy visited the St. Albans Cooperative Creamery Dec. 3 to discuss the prospects for the bill. The Farm Bill, typically approved every five years, was due for renewal in 2012, but when the House of Representatives failed to pass a new bill, Leahy arranged a last minute, one-year extension of the previous law.
Sen. Debbie Stabenow, D-Mich., who chairs the Senate Agriculture Committee, has said there will not be an extension this year, that only a new Farm Bill will satisfy the Senate.
Absent an extension or a new Farm Bill, a law passed in 1949 would go back into effect. Under that law, commonly referred to as “permanent law,” the government must intervene to raise the price of crops and milk to “parity,” which is defined as the purchasing power of those crops in 1910-1914.
A year ago, the parity price of milk, according to the Congressional Research Service, would have been $49.70 per hundredweight, more than double the price farmers are currently receiving.
“It’s chaos,” Leahy said of the impact of permanent law on dairy markets.
Nevertheless, he supports Stabenow’s position.
“Stabenow is correct in saying we’re not going to do an extension,” he said.
The Associated Press reported that, despite the fact that members of the U.S. House left Washington for a holiday break last Thursday, there was still time to avoid $49 cwt. milk. House and Senate negotiators have received assurances from the USDA that it can prevent milk prices from spiking before the end of January and all sides are hopeful of an agreement by then, according to the AP.
According to Leahy, Republicans and Democrats in the Senate also have rejected $40 billion in cuts to the Supplemental Nutrition Assistance Program (SNAP), previously known as food stamps, approved by the House.
“The House numbers are totally unacceptable,” said Leahy. “There will not be a Farm Bill if they insist on those cuts.”
“You’re not going to send children to school hungry,” he said, pointing out that children cannot learn if they are hungry.
According to the White House, the House cuts would remove 3.8 million people from SNAP in the first year, and deny 210,000 school children free or reduced-price school lunches.
“The bumper sticker sloganeering has got to end,” Leahy said of the manner in which some members of the House have approached discussion of the Farm Bill and SNAP.
There was a member of the House who called for drug testing of all SNAP recipients, Leahy pointed out. “He hasn’t said it since he was arrested,” he added.
Leahy was speaking of Florida Republican Trey Radel who voted in favor of drug-testing SNAP recipients a month before being arrested for cocaine use.
DAIRY SECURITY
Food for the poor isn’t the only contentious issue in the bill. The House and Senate have approved different dairy programs.
The Senate passed a new bill including the Dairy Security Act, which would replace current dairy support programs with a margin insurance program and a supply management program intended to bring a halt to large swings in the price of milk.
Leahy noted that the initial ideas for those programs came from Vermont and had won broad support from dairy farmers across the country, in part because of the lobbying efforts of Franklin County-based Dairy Farmers Working Together.
House Speaker John Boeher, R-Ohio, has opposed the supply management program and it was dropped from the House version of the Farm Bill.
Currently, dairy farmers are enjoying a comfortable price for their milk, in part because of an increase in exports, and low grain prices. But Leahy reminded the small crowd in St. Albans that things were considerably less rosy in 2009 when farmers were receiving less than the cost of production for their milk.
“We don’t write farm bills for the good times,” he said. “We write them for the bad times.”
“If we don’t get rid of the volatility, we’ll be right back where we were,” said Leahy.
Dairy economist Bob Wellington of Agrimark, also present at the Leahy event, has found that large swings in milk prices can be traced to very small changes in the supply of milk. The supply management program is intended to signal farmers when the supply is exceeding the demand so farmers can reduce production and avoid a dramatic drop in prices like those seen in 2006 and 2009.
Neither farmers nor consumers benefit from the price swings, said Wellington, since bottlers and other dairy manufacturers don’t typically pass their reduced costs onto consumers. In 2009, Dean Foods, the largest bottler of fluid milk in the U.S., reported record profits, for example.
“Farmers get hurt. Consumers don’t benefit,” said Wellington.
The margin insurance program partially insures dairy farmers against rising feed prices or falling milk prices, or a combination of the two. An insurance program without a supply management program to eliminate price swings would end up costing the government more than current dairy programs, said Wellington. “We’re going to have a budget buster a year or two from now,” he said. “There’s no way to correct the marketplace.”
Boehner has argued that the supply management program interferes with the free market.
“There isn’t a free market in dairy,” said Wellington.  Indeed, the price of milk is actually set by the USDA based upon the price of cheese on the Chicago Mercantile Exchange.
The supply management program is a marketplace solution to the volatility of dairy prices, in Wellington’s view. “You’d think they also would like a marketplace solution,” he said of House Republicans.
CONSERVATION AND
OTHER PROGRAMS
The Farm Bill also includes multiple conservation programs, representing potentially $15 million for water quality work in Vermont, according to Vermont Secretary of Agriculture Chuck Ross. “That is critical,” he said.
Ross also spoke of the importance of the energy, organic and research programs in the bill.
If farmers are to be able to feed 9 billion people then funds for research are needed now, said Ross.
Several programs also are crucial to support the continued growth of diversified agriculture, he suggested.
Ross said his counterparts in every other U.S. state support the passage of the farm bill.
The bill, he said, is “critical to our future.”