Stabilizing milk prices for dairy farmers in New York was a hot topic at a House of Representatives Agriculture Committee field hearing Friday at North Country Community College, Saranac Lake, that highlighted policy changes slated for the 2012 farm bill.
Rep. William L. Owens, D-Plattsburgh, a member of the Agriculture Committee, spoke by telephone after the hearing about two federal programs that are designed to help dairy farmers combat fluctuating milk prices: the Livestock Gross Margin and Milk Income Loss Contract programs.
The margin insurance program would help dairy farmers by providing a guaranteed level of income based on the difference between the price of milk and feed costs, which are determined by national rates. Farmers purchasing insurance through the program would be protected when feed costs rise or milk prices drop, making it an attractive option for small, family-owned and medium-size farms that are susceptible to fluctuating milk prices.
If the profit margin between feed and milk costs drops from $2 to $1.90, for example, farmers participating in the program would receive federal payments to make up for that loss.
Farmers are telling me theyve had a horrible swing in milk prices over the last 10 years, and right now theyre trying to get more stability with pricing, Mr. Owens said, adding that 80 percent of farmers surveyed across the country support the program. Everyone knows that milk prices are going to move, so this ensures their profit margin stays stable.
To help keep the national supply of milk stable, farmers who participate in the program would be fined if their milk production exceeds a certain amount, based on the number of cattle they have on their farms, Mr. Owens said. Fines collected would be used to help fund the margin insurance program.
While managing the milk supply has been controversial among farmers across the country and in New York state, Mr. Owens said, farmers who dont want to participate in the program will be able to opt out.
The most difficult part is the supply management piece and whether the government should have the right to impose limitations on the supply of milk, Mr. Owens said.
The Milk Income Loss Contract, which pays farmers when prices fall below $16.94 per 100 pounds of milk, is in the current farm bill. There are growing indications that it will be retired by Congress.
Another pressing issue in the farm bill, Mr. Owens said, is developing a sound policy on immigrant farm workers, who make up a large portion of the work force at dairy farms in the north country. Because of penalties imposed for hiring workers without proper documentation, many farmers are cautious when it comes to hiring immigrants. One possible solution would be to implement a guest worker program for immigrants working in the United States who dont have a criminal record, which would allow them to freely travel back and forth between the U.S. and their home countries.
We need to have a guest worker program that allows dairy farms, in particular, to have an adequate supply of labor, Mr. Owens said. If you fully enforced all of the immigration laws, youd put farms out of business.
Mr. Owens said the Agriculture Committee hopes to approve the farm bill in the next six months, keeping all of the planned programs intact. The real fight now is how much money is going to be available to fund this bill and how the dollars are divided, he said.
Other field hearings on the bill will be in Illinois, Arkansas and Kansas.