Gillibrand introduces modified dairy proposal

Source: International Dairy Foods Association

U.S. Sen. Kirsten Gillibrand (D-N.Y.) introduced a new bill, the “Dairy Income Fairness Act,” that would modify the terms of the margin insurance and the supply/growth management programs proposed in the Dairy Security Act (DSA).

According to the International Dairy Foods Association (IDFA), the bill, S. 605, would replace current dairy programs with a version of the Dairy Producer Margin Protection Program and the Dairy Market Stabilization Program (DMSP) found in the Dairy Security Act (DSA). The Milk Income Loss Contract (MILC) program payment trigger would be raised from $16.94/cwt. to $18.85/cwt. and phased out nine months after enactment of the bill.

Unlike the DSA, which offers producers free margin insurance at $4.00/cwt., S. 605 would offer free margin protection at $6.50/cwt. for all production up to 4 million lbs., and would exempt the first 4 million lbs. from the base quota calculation under the DMSP. According to the latest USDA statistics, approximately 88% of dairy farmers produce less than four million pounds annually.

The bill would require handlers to reduce dairy payments to farmers when directed to do so by USDA under DMSP. The portion of farm payments withheld from farmers would be remitted to USDA by handlers, and the bill would include new government audit requirements and enforcement penalties.

“IDFA opposes S. 605 because it establishes virtually the same supply management program as under the DSA, albeit with exemptions for small farmers,” said Ruth Saunders, IDFA vice president of policy and legislative affairs. “The end result would still raise consumer milk prices and establish complex new regulations on dairy manufacturers. IDFA does not oppose margin insurance, as proposed in S. 605, if it is entirely decoupled from supply management, which it is not."

The bill also calls for additional dairy product mandatory reporting and various provisions to review the federal order system. These provisions were included in the dairy title of the Farm Bill passed by the Senate in the last Congress. 

S. 605 has been referred to the Senate Agriculture Committee. It is unlikely the bill will be taken up until the Farm Bill process begins again in April.