A22-Uncwter Firming, 'Saturday, March 2,1996
Farm Organizations Split
(Continued from Pago A 1)
House proposal and its dairy
provisions.
According to a position paper
distributed during the conference,
there are six major reasons why the
three organizations Grange,
PFU and Pro Ag “cannot sup
port the proposed National Dairy
Bill in its present form.”
In it’s summary, the position
paper states, “The proposed Dairy
Bill (in the House version) does
establish a minimum Class I price
(the price to farmers for milk sold
that is used as fluid milk) for two
years equivcftent to the January
1996 level.
“The proposed Bill also abolishes the current
Commodity Credit Corporation Assessment on
producers.
“However, there are no minimum prices
established for any class usage of manufactured
milk except the support price on cheese for
$10.33 cwt (per hundedweight) for 1996 and
$10.23 cwt for 1997 and with the support
price being removed from butter and powder,
consequently one can assume that prices paid for
manufactured milk will commence to descend
this spring.
“In all probability, prices received by dairy
farmers for milk produced in January and Febru
ary of 1996 could be the highest prices received
by dairy farmers during 1996 and 1997.
“Therefore, as a result of the concerns listed in
this position paper, we cannot support the prop
osed Dairy Bill identified as H 2854, without
these concerns being addressed in a positive
way.”
According to the position paper, those con
cerns include:
• The current basic formula price that esta
blishes the prices paid to dairy farmers stays
intact. Consequently, there remains no relation
ship between the prices paid to dairy farmers and
the cost of producing their milk. Therefore, esti
mated prices paid to dairy farmers under the new
proposed dairy bill falls short of covering the
average cost of production to our dairy farmers
and farmers should have the right to receive their
cost of production plus a reasonable profit.
• The proposed bill calls for the national pool
ing of part of the Class I differential paid to area
dairy farmers (80 cents per cwt). This means part
of the money that is due to area dairy farmers will
be transferred to dairy farmers in other sections
of the country.
• The bill calls for the elimination of the milk
price support program for butter and powder.
Consequently the value of milk used for these
products could drop on the price to producers.
• The proposed bill calls for national pooling
of 50 percent of the differences between Class IV
price and the support price on cheese. Depending
on how low the Class IV goes, the cost to area
dairy farmers could be between 10 cents and 25
cents per cwt.
Therefore... area dairy farmers will lose some
of the Class I price owed them, and in exchange
for this, their blend price will be reduced because
of the national pooling of the Class IV price.
• The proposed Dairy Bill appears to call for
the elimination of state orders, such as what we
have in Pennsylvania. Under the proposed bill,
by December 31,1997, the Secretly of Agricul
ture must consolidate the present numbers of fed
eral milk marketing orders down to a number
somewhere between eight and 13. How much of
an input will dairy farmers have in the new milk'
orders? A referendum should be put in place on
all final decisions that affect the federal milk
marketing orders, to allow producers to have a
voice in this matter.
• If, for whatever reason, the U.S. Secretary of
Agriculture fails to implement the new federal
milk marketing orders within two years because
of enactment of this bill, the dairy industry
becomes completely deregulated with no federal
milk marketing orders, no federal dairy support
program and no pricing mechanism. It is crucial
that the Secretary of Ag acts within two years and
it should be mandatory for him to do so.
On the other hand, Keith Eckel, president of
the Pennsylvania Farm Bureau in news releases
made during the past two weeks, urged quick
passage of the Farm Bill, foreseeing a beneficial
result of the proposal for ail fanners, and dairy
farmers.
That is also the position of the
National Farm Bureau, the Nation
al Milk Producers Federation and
the state’s dairy cooperatives.
Eckel’s reasons for getting a
Farm Bill passed include the fact
that without one, farmers won’t be
able to know what they should
plant
“It’s already too late for farmers
in the Southern belt and in a matter
of weeks it could be chaos for all
farmers heading to the field to
plant their crops.”
Eckel stated support for the
Senate’s version of the farm bill,
though noting its lack of dairy poli-
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cy. He said that Farm Bureau Sup
ports the Senate version and the
House version with the under
standing that the final compromise
bill sent to the President for sign
ing into law will be a hybrid that
addresses dairy policy and ensures
something of a safety net, called
transitional support, before even
tually being turned over entirely to
market forces.
Further, he asserted that with the
existing Farm Bill soon ending,
and without a new one taking its
place, the nation would revert to
1949 regulations which “would be
disastrous.”
An extension of the 1990 Farm
Bill has been suggested by some,
though none of the Pennsylvania
groups representing agriculture
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According to Eckel, both bills
will benefit farmers and consum
ers. In a news release containing
Eckel's comments, stales, ’The
(Farm Bill) measures provide far
mers with income stability during
the next seven years, and positions
U.S. agriculture to compete more
aggressively in world markets.”
The difference in opinion over
policy has been ongoing for a num
ber of years and it seems to have
resulted in the polarization of two
camps within agriculture, espe
cially the dairy industry those
operations that have grown conti
nually in size and efficiency during
the past decade and those that have
attempted to operate more tradi-
uipment
SEA
' Sdnally and less* aggressively. '
The United States farm policy
was developed to prevent the
nation’s citizens from starvation
and suffering by ensuring con
stant excess food supply, the
nation’s middle and low income
citizens (most) could continue to
be assured adequate food at low
cost.
On the other hand, that policy
also prevents fanners from ever
making the kind of profit possible
because as efficiencies increase,
supplies increase, prices continue
to drop, and at the same time com
petition isn’t diminished because
support prices can continue to keep
operations afloat.
Efforts to expand agricultural
(Turn to Pago A 23)
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