Senators push to keep ‘federal order’ amendment in final Farm Bill

If and when Senate and House leaders negotiate the final terms of a 2012 Farm Bill, U.S. Sens. Kirsten Gillibrand (D-N.Y.) Olympia Snowe (R-Maine) want to make sure their amendment addressing federal order reforms remains intact. In a letter to Senate Ag Committee chair Sen. Debbie Stabenow (D-Mich.) and ranking member Sen. Pat Roberts (R-Kan.), they and seven other senators joined in requesting amendment S.1481 be in the final bill.

Ultimately, the goal of the legislation is the elimination of end-product pricing formulas. The amendment requires USDA to collect information on various pricing systems, and to assess the impact of a change to end product pricing on price volatility, producer payments and overall fairness and efficiency in pricing. USDA is also required to report analysis to the Agriculture Committee. At present, this language is only included in the Senate Farm Bill proposal, and not in the House Ag Committee proposal. 

The Snowe-Gillibrand amendment would allow dairy industry groups to present milk pricing reforms to USDA for consideration in a public hearing setting, and order the Secretary of Agriculture to release the USDA’s final proposal to Congress. 

The effort to keep the Snowe-Gillibrand amendment as part of any final Farm Bill deal is supported by Sens. Jeff Bingaman (D-N.M.), Tom Udall (D-N.M.), Susan Collins (R-Maine), Bernie Sanders (I-Vt.), Sherrod Brown (D-Ohio), Maria Cantwell (D-Wash.) and Patty Murray (D-Wash.). 

According to the letter, “The current federal milk marketing order formula, relying on end product pricing, has produced negative, unintended consequences for dairy farmers all across the country. The dairy pricing amendment would direct the Secretary of Agriculture to consider changes to the end product prrcing formula and report back to Congress.

“By all accounts, the end product pricing formula relies too heavily on the ‘spot’ clearing prices for the end products of unprocessed milk,” the letter continues. “This reliance has resulted in tremendous volatility in producer pricing. In addition to providing the proposed margin insurance program as a tool for producers to respond to market uncertainty, Congress must also direct USDA to work to correct the formula itself.

“It is vital that the 2012 Farm Bill address the chronic problems facing regulated dairy farm pricing along with providing risk management tools. As negotiations on the Farm Bill continue, we urge you to ensure the inclusion of this important provision in any final agreement,” the letter concludes.

“For years, New York’s dairy farms have endured volatility in the market – as feed and fuel costs rise, the price of milk plummeted,” said Gillibrand, a member of the Senate Ag Committee. “When our family farms suffer, our whole state and whole economy suffer. Our bipartisan amendment is a strong step to give farmers a better, more just pricing system that they deserve, and it must be part of any final Farm Bill.”