Farm Bill Includes New Milk Pricing System

Jun 10, 2013

Congress has been unable to agree on the provisions of a new Farm Bill for more than a year.

The Farm Bill, which has passed the Senate and will be taken up by the House of Representatives this month, reduces federal spending on agriculture by $23 billion over the next five years by goal by eliminating most commodity subsidy programs and cutting the Food Stamp program by $4 billion.

Senator Patrick Leahy says the bill includes an important new pricing system for dairy farmers.

Under the voluntary plan, farmers will be able to purchase insurance to guarantee stable prices whenever market forces drive prices below the cost of production. Leahy says the program will bring some much needed stability to many dairy farmers.

I think that what we have in here for dairy is going to bring more stability - Senator Patrick Leahy

"You might have a few months of prices are way up and that sounds great but then they drop dramatically  while the price of your electricity, your taxes, feed, amortization on your buildings those continue the same whatever the prices are,” says Leahy. “I think that what we have in here for dairy is going to bring more stability.”

Vermont Agriculture Secretary Chuck Ross says the current system of extreme price fluctuations makes it difficult for dairy farmers to plan for the future.

“The challenge for the dairy farming community has been to make enough money while the prices are really high so they can sustain their financial wherewithal during the times when prices are painfully low,” says Ross. “That is a really difficult business management practice.”

And Ross says dairy farmers desperately need a system to stabilize their milk prices.

“Then they can plan a more sensible financial business going forward make investments, in accordance with what they can reasonably anticipate the prices of their inputs and their outputs to be,” says Ross. “So that kid of stability is absolutely critical.”

The bill also includes a plan by Leahy to create five pilot projects in rural communities nationwide to bring ultra high speed Internet access to these areas over the next few years.  Leahy is hoping that one of the sites will be in Vermont.

“We have demonstrated that businesses are eager to come to Vermont they like to come into some of our rural areas but need the ability to have phone connections, Internet connection, power and so forth,” says Leahy. “This would give us a great step forward if we had this.”

The measure will now be considered in the U.S. House where it faces an uncertain future.