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Dairy economists analyze Dairy Security Act vs. Goodlatte-Scott
 
In dairy politics, DairyBusiness Update (DBU) reports that a team of university dairy economists have compiled a new report comparing two major dairy policy proposals. The paper, “Goodlatte-Scott vs. the Dairy Security Act: Shared Potential, Shared Concerns and Open Questions,” reports analysis and expected short-term impacts of the Dairy Security Act (DSA) and the Goodlatte-Scott Amendment (G-S).

Academic in nature, the report suggest both DSA and G-S are effective in providing catastrophic risk insurance and revenue enhancement for dairies with stable and moderately growing milk marketings. 

If dairy producer participation rate is high and the impact on consumer demand for milk is low, DSA’s Dairy Market Stabilization Program (DMSP) has the potential to reduce government outlays and accelerate margin recovery during low-margin periods. G-S effective catastrophic margin insurance for aggressively growing farms is limited due to the fixed production history. However, more complete margin risk protection may still be possible using private risk markets to complement government provided insurance. 
The primary focus of the analysis was the proposals’ short-term effects. The long-term impacts on the growth of milk supply, dairy exports and liquidity of private dairy risk markets were not addressed.

National Milk says the analysis “demonstrates that the DSA provides the most effective economic safety net for farmers.” NMPF’s Jerry Kozak said “The assessment, generated by the Midwest Program on Dairy Markets and Policy, shows DSA provides catastrophic risk insurance, helps enhance farmer revenue, and does so in a way that minimizes government outlays.”
He added that the report “debunks any concerns that the DSA’s market stabilization element will hinder the growth of our industry or detrimentally affect the future of the dairy business. This says those fears are unfounded,” he said. “In fact, we need the DSA in order to give our farmers a future.”

Processors charge that the study “clearly shows consumers and taxpayers will bear the brunt of bad dairy policy.” An IDFA press release stated; “The study confirms what the Congressional Research Service has reported, the Dairy Security Act will raise milk prices and force consumers to pay more for dairy products.” 
According to the authors, “DMSP is a supply management-type program designed to enhance milk prices. The DMSP aims to reduce the milk supply and thereby enhance milk prices by imposing income penalties on dairy farmers shipping milk over their assigned production level.”

“Goodlatte-Scott is a more responsible approach to a government-funded Farm Bill,” said IDFA’s Jerry Slominski. “It provides an effective safety net, according to the Congressional Budget Office, without also imposing an anti-consumer ‘growth management’ program on the dairy industry. The reality is that farmers can have effective risk management tools without the government getting involved in limiting production and forcing consumers to pay more for dairy products, a key provision of the Peterson plan.”

Immigration policy introduced

In another crucial policy front; a bipartisan immigration policy reform proposal introduced in the Senate was praised by agricultural and dairy leaders. DBU’s Dave Natzke reported in Friday’s DairyLine that “The proposal introduced in the Senate on Wednesday (April 17) was called “historic” by representatives of major dairy, cooperative, fruit and vegetable grower and farm labor organizations during a joint press conference held this week. 
Members of the Agriculture Workforce Coalition said the proposal addresses the major needs of U.S. farmers and workers and helps fix a broken immigration policy that is leading to shortages of workers to produce, harvest and pack the nation’s food supply. 
National Milk’s Jerry Kozak participated in the press conference and identified four key pieces of the proposal essential to dairy producers, covering both current and future immigrant workers.
They include creation of a “blue card” for experienced but undocumented workers, providing them legal protection from deportation; and creation of a new visa program that will provide a stable supply of legal workers in the future. 

The bill would create a system whereby dairy and other agricultural producers can recruit and hire new workers, either on a contract or at-will basis, from a pool of applicants. The visa program would also do away with current visa requirements that only address the needs of seasonal occupations, since dairy farming is a 365-day-a-year job.

The bill would also create specific categories of agricultural workers, and establish minimum wages for each group based on the skills required, and provide other worker protections. And, the “blue cards” would be extended to workers spouses and children to help immigrant labor families stay together. 

The views and opinions expressed in this column are those of the author and not necessarily those of Farm World. Readers with questions or comments for Lee Mielke may write to him in care of this publication.
4/25/2013