Casey Urges Immediate Fix So PA Farmers Aren’t Unduly Impacted
WASHINGTON, DC – With farmers operating under a reduction in the dairy program in the current Farm Bill, U.S. Senator Bob Casey (D-PA), a member of the Senate Agriculture Committee, is pushing for a temporary fix for the dairy safety net until the new dairy program that is included in both the Senate and House versions of the Farm Bill becomes law and can be put in place by the U.S. Department of Agriculture (USDA).
“The 2008 Farm Bill contains provisions I fought for to ensure dairy farmers are protected from low margins and high feed costs like those caused by the current drought,” said Senator Casey. “But until the new Farm Bill is enacted, Pennsylvania dairy farmers stand to be negatively impacted by the reduction in safety net measures. I urge House and Senate leaders to ensure this problem is fixed so our dairy farmers can continue to produce and fuel Pennsylvania’s economy.”
The Senate-passed and House-proposed Farm Bills both would end the Milk Income Loss Contract (MILC) program and replace it with a new margin insurance program for the nation’s dairy farmers.
Senator Casey was instrumental in strengthening the MILC program in the previous Farm Bill and secured provisions to protect dairy farmers in the new Farm Bill, which was to have been enacted by the time current farm programs expire on Sept. 30. But with only days to go until the deadline, the House has yet to act on its version of a new Farm Bill. The Senate passed its version on June 21, with a strong bipartisan vote of 64 to 35.
Meanwhile, parts of the MILC program changed on Sept. 1 and will result in coverage levels so low that the program is not expected to be triggered even in these times of high feed prices, leaving individual dairy farmers with practically no safety net. With drought-related feed costs soaring, this new gap in coverage threatens to leave dairy producers in the lurch until a new Farm Bill is enacted. According to dairy economists, this decline in the MILC feed cost adjuster would prevent the program from providing any support to the nation’s dairy farmers, despite soaring feed costs caused by the nation’s crippling drought.
In a bipartisan, bicameral letter to House and Senate leaders signed by 60 lawmakers in all, Senator Casey urged that until a new Farm Bill is enacted and the USDA has a dairy program in place, offsets be found to maintain the MILC program at its previous coverage levels for the duration of any extension of current policy.
The full text of the letter is below:
Dear Majority Leader Reid and Speaker Boehner:
Given the mounting challenges facing our nation’s dairy farmers, we write to bring a matter of particular concern to your attention.
On September 1, 2012, the Milk Income Loss Contract program, which has provided a vital safety net to dairy farmers across the country during times of low milk prices and high input costs, began to provide coverage at a reduced level. The level of coverage is so low that the program is not expected to be triggered even in these times of high feed prices. Most concerning to us is the change in the program’s feed cost adjuster, which was created in the 2008 Farm Bill to address volatile swings in feed prices. This change in particular has put our farmers at far greater risk as this year’s drought continues to impact much of the country and drive up the cost of feed. In addition, instead of offering dairy farmers coverage at 45 percent of the difference between the target price and the actual price, the program now only provides coverage at 34 percent of this difference. The program’s volume cap has also declined, falling from 2.985 million to 2.4 million pounds per dairy farmer
We understand that the Senate-passed Farm Bill and the House Agriculture Committee’s Farm Bill both move to eliminate the MILC program in favor of a new policy. However, until a new Farm Bill has been enacted and USDA has a dairy program in place, we urge you to find the necessary offsets to maintain the MILC program at its previous coverage levels for the duration of any extension of current policy. Dairy farmers across the country have benefited from the MILC program during difficult times and we fear that failure to maintain the program at its previous levels will saddle dairy farmers with significant risks as their feed prices continue to skyrocket.
Thank you for your consideration of our request. We stand ready to work with you to address this critical issue for our nation’s dairy farmers.
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