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GOODLATTE: No command and control for the cows
Margin insurance would give farmers freedom and a safety net
The House is expected to consider this week the reauthorization of the farm bill, a multiyear plan for the future of American farming. While much of the media coverage of the debate in the Senate centered on nutrition programs, an important battle is brewing in the House regarding dairy policy.
As the House Agriculture Committee debated dairy policy, Chairman Frank D. Lucas, Oklahoma Republican, worked with the entire dairy community to eliminate ineffective dairy programs and consolidate them into a margin insurance program that provides an important support backstop for American dairy farmers.
This approach reduces federal bureaucracy by eliminating four current programs — the Dairy Product Price Support Program, the Milk Income Loss Contract Program, the Dairy Export Incentive Program, and the Federal Milk Marketing Order Review Commission — and moves the dairy program to a margin insurance program. These are good reforms and should be embraced as a concrete step toward modernizing the dairy safety net.
Where the true dairy debate begins, however, is over another provision in the farm bill — the Dairy Market Stabilization Program. It is a supply-management program that will directly intervene in markets and increase milk prices, ultimately costing Americans more money at the grocery store and forcing businesses to raise their prices. This program thrusts government directly into private commercial transactions, and will unnecessarily increase prices that families pay for products such as milk, yogurt and cheese. Simply put, the program is designed to keep milk at artificially high prices, unfairly hurting consumers and driving up the cost to run a business.
During floor consideration, I will offer an amendment with my Democratic colleague from Georgia, Rep. David Scott, to eliminate the Dairy Market Stabilization Program. Like the base text of the farm bill, the Goodlatte-Scott amendment will eliminate four current dairy programs and move dairy farmers into a margin insurance program, but does so without implementing the new federal supply-management program.
For members just now focusing on the upcoming dairy debate as a part of the farm bill reauthorization, I would note that there is one basic choice to be made on dairy policy. The question on the table will be: Do you support the creation of a new federal supply-management program that will control milk production for American farmers and raise the prices of dairy products, or not? Both the farm bill and the Goodlatte-Scott amendment make much-needed base reforms to existing dairy policy and move toward a margin insurance program. The only real difference between the two is whether or not you support market intervention.
Furthermore, the Congressional Budget Office has determined that implementing the program will cost more than moving forward with the Goodlatte-Scott amendment. With all of the great reforms made in the farm bill, why would the House support the creation of a new bureaucratic program to control the production of American dairy farmers, and at a greater cost than the alternative?
Let's move away from 1930s-style command-and-control supply-management programs and toward a system that encourages the production of American dairy products for domestic and international distribution. I encourage my colleagues to support the Goodlatte-Scott amendment to the farm bill to eliminate the Dairy Market Stabilization Program and support dairy farmers and consumers.
Rep. Bob Goodlatte, Virginia Republican, is a former chairman of the House Agriculture Committee and currently chairman of the House Judiciary Committee.
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