Lawmakers Near Farm Bill Deal to Avert Milk Price Fiasco
Paul Doton, inside his family’s Barnard dairy barn, estimates that up to 90 percent of the farm’s income comes from selling dairy products. Congress yesterday appeared to be close to a deal to avert a “dairy cliff” of sorts, when an extension of the five-year farm bill, including milk price supports, was set to expire. The last-minute deal is for a one-year extension of current law. Farmers had hoped for a new five-year plan. (Valley News - Ryan Dorgan) Purchase photo reprints »
Paul Doton spreads feed for his dairy cattle yesterday at his family farm in Barnard. Farmers such as Doton are waiting to hear the outcome of negotiations on the federal farm bill. (Valley News - Ryan Dorgan) Purchase photo reprints »
Barnard — Lawmakers in Washington struck a last-minute deal yesterday to extend agriculture legislation for one year, putting to rest fears that Congressional inaction would lead to a potential doubling of retail milk prices next month.
While the framework of the deal reached yesterday is one that New England dairy farmers said they can live with, the theatrics of the last-minute negotiations in Washington — not unlike the “fiscal cliff” — have left many of them unimpressed.
“I guess this is the best we could’ve hoped for, that they didn’t mess everything up,” said Paul Doton, of Barnard, who also sits on the board of Agrimark — the northeastern dairy cooperative.
But Doton, like other dairy farmers, would prefer a five-year extension, which is how the bill is typically reauthorized.
While he isn’t quite yet ready to retire, Doton said he is getting to “that age,” and has been feeling hesitant lately about leaving the family farm he inherited from his parents to his 26 year-old son, Bryan, given the uncertainty in the dairy industry.
“There’s just no security,” said Doton. “We’re not looking for a government buyout to make sure we’re profitable, but if the price drops to the level where it isn’t sustainable, it would be nice to have emergency stoppage.”
The most current version of the law, passed in 2008, expired at the end of September. It included a federal subsidy designed to prevent dairy farms from going under when the prices associated with milk production spiked.
The subsidy provided protection against forces — from the price of feeds and fuels to taxes and utility costs — that could weigh heavily enough to sink a struggling dairy operation, said Doton. Critics of the old milk subsidy said the program was too costly, and Doton himself agreed that it was not a sustainable design.
Doton said he much prefers a new version of the farm bill passed by the full Senate and the House agriculture committee earlier this year. That legislation features a subsidy to help farmers weather milk price swoons, but this time, the farmers had a say in how it was designed. The new program, referred to as the Dairy Security Act, includes a supply management program that was influenced in part by Vermont farmers and championed by U.S. Rep. Peter Welch, D-Vt., who sits on the House agriculture committee.
The program would guarantee a minimum $4 margin between average feed costs and milk prices per hundred weight, but in order to enroll for that insurance, a farmer would have to also sign up for a supply management component, which is designed to force a reduction in milk production when the market price drops.
Doton said the program offers a way for the federal government to signal to milk farmers when to cut back production. He said no such signal exists in the existing program.
The bill, however, was never brought to the full House for a vote. In July, House Speaker John Boehner, R-Ohio, said of the market stabilization component, “We have a Soviet-style dairy program in America today, and one of the proposals in the farm bill would actually make it worse.”
If Congress does not vote on an extension, which includes the supply inventory system, or the full bill by the end of the day today, the law could revert back to a version of the farm bill from the 1940s, a result that politicians and dairy farmers alike say would have a disastrous affect on milk prices.
In an interview on Friday, Welch said that the odds of Congress reaching a deal on the farm bill were “slim to none.”
“It’s inexcusable. We’re being called back to Washington to literally do nothing, it’s just political theater,” Welch said, referring to the ongoing debt negotiations. “So while we’re siting there doing nothing, why don’t we take up the farm bill?”
Welch said that a failure to extend the farm bill would “create chaos” in the dairy industry. He said that, much like the “fiscal cliff” crisis, the dispute over the farm bill represents a “bad and dangerous place for America.”
“Congress is an important institution, disrespected as it may be,” said Welch. “It has the authority and the responsibility to do things that need to be done. When it’s so dysfunctional that it doesn’t even bring to the floor for a vote the five-year farm bill, it’s hard to imagine it getting much worse.”
The political wrangling in Washington appeared to be wearing on farmers across the Valley yesterday.
“We live day-to-day in a pretty volatile world as it is,” said Walter Gladstone, a Bradford, Vt., dairy farmer. “If we operated our business in that fashion, we’d probably go broke.”
Gladstone said that the current subsidy is crucial for big and small dairy farmers alike in Vermont. He said he milks about 1,000 cattle at his farm, and his neighbor milks around 30.
“At the end of the day we both want to be profitable, and we both want to survive,” Gladstone said.
Before news of an agreement broke yesterday, Rendell Tullar said he had faith that politicians would do something to avoid reverting to the 1940s farm bill, but he didn’t think the solution would wind up being popular with everyone.
“There’s no point in staying awake nights worrying about what they’re going to do, because I can’t control it,” added Tullar, who milks about 400 cattle on his farm in Orford, where he’s lived since 1956.
Tullar said his biggest hope was that Congress would manage to pass something that amounted to more than a temporary measure.
“I don’t want to see something that’s one-month, or a six-month or one year,” he said. “I want to see them get something done and prove that they can do what they’re elected to do.”
Ben Conarck can be reached at email@example.com or 603-727-3213.