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Dairy farmers lament new farm bill milk policy (02/13/2013)
By Chris Rogers

U.S. Senator Al Franken (DFL-Minnesota) met with farmers and others to discuss the farm bill on Saturday, February 9, in St. Charles. "That's why I'm really here, I want to hear from you—more important than you hearing from me—how the extension is affecting you, how the lack of a five-year bill, how the lack of certainty is affecting you," Franken told the audience as they settled into their seats.

That message would appear to be what he took away from it as well. When asked what Senator Franken took away from the meeting, the Senator's Deputy State Director for Communication, Marc Kimbal, said in an interview, "I think what he took away, by and large, is he really needs to continue his effort to get a five-year farm bill done this year as soon as possible."

Audience members did not say much about the importance of getting a new farm bill passed as soon as possible, but rather commented on what they want to see in a new farm bill, concerns they have with the existing proposal, and other policy changes they wanted to see.

Audience members voiced a diversity of concerns and viewpoints on a wide spectrum of topics including crop insurance, energy production, immigration reform, labeling genetically modified foods, and national defense. However, dairy policy was a prominent point of discussion throughout the meeting.

In particular, dairy margin insurance—which provides farmers with payouts when the cost of dairy production exceeds the price of milk—was a hot topic. Currently, the federal government subsidizes margin insurance programs—including the Milk Income Loss Contract (MILC) program—for dairy farmers. Under the proposed farm bill, MILC would be cut and replaced with a new, voluntary margin insurance program. Farmers that opted into the new margin insurance program would also be required to participate in a supply management program which would set a price "floor" for milk. That program would limit the amount of milk farmers would be paid for when milk prices fall below the price "floor."

At the Saturday meeting, local dairy farmer and President of the Winona County Farm Bureau Glen Groth thanked Franken for advocating for a five-year farm bill, but emphasized the importance of existing margin insurance programs to his operation and said that he was "a little leery" of the proposed dairy supply insurance program.

"I want to encourage you to support the dairy margin insurance part of the bill, but I am leery of the supply management part of the bill, and that's where the uncertainty comes in for me. Because I am a young farmer beginning, I would like to keep growing my operation, and I'm worried about what effect a supply management program would have on my ability to grow," Groth said.

Another dairy farmer in attendance told Franken, "Supply management just scares me to death. I have heard from farmers in Canada and in Europe that they cannot wait to get rid of the supply management because they cannot bring family members in. I have a couple family members who wanted to come into our operation in the next five years. That won't be feasible with supply management."

The concern is that by effectively setting a minimum price for milk, the proposed dairy programs would limit the ability of American dairy farmers to compete with international dairy producers abroad and with other foods domestically (e.g. consumers who chose soda over milk) and thus limit their ability to expand.

While dairy farmers would have the option to join the proposed margin insurance and supply management program or not, Senator Franken's head of agriculture outreach, former state representative Al Juhnke nailed the feelings of many farmers on the issue, "The program they are replacing [MILC] with is voluntary, but his point is, and probably all the diary farmers here is, that it is voluntary, but who wants to go without margin insurance?"

A Caledonia dairy farmer who asked for his name to be withheld, told Franken that, "I feel like in the Upper Midwest, we're probably better off with [MILC] than if what we were asking for [the proposed programs] would have been approved. With the more average size dairy farmers you have to have some pretty severe prices for the margin part of that to kick in. I think there are some prices coming where the MILC will pay out better than what we were asking for.

"MILC tends to kick in more often and is more helpful for the average size dairy farmer," he added.

Two other people in attendance said they wanted to see the proposed margin insurance, but opposed the supply management program.

While Franken listened, it is unclear whether the voices of local farmers and others from the Saturday meeting will ultimately make any impact on the next farm bill, or even Franken's position.

Juhnke told audience members, "We have had a real split in Minnesota as we have gone around meeting with farmers and farm groups; Minnesota Milk Producers were not real excited about the new program, I should say. But some of the co-ops, Land O'Lakes and some of our Minnesota-based co-ops, were supporting it. So in Minnesota even we have a split on that program. So Senator Franken needs to hear from you what's going to be best. We're listening."

In an interview with the Winona Post, Kimbal, Franken's spokesman said, "This is the first in a series of listening sessions we are going to do on the farm bill." He said that while Franken values the input of farmers who criticized the proposed dairy policy at the "very successful" Saturday meeting, there are other opinions from Minnesota farmers, "farm leaders" in Washington D.C., and 99 other senators to take into consideration. "At the end of the day they have to get something that can pass," he said. 


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