The Hagstrom Report

Agriculture News As It Happens


Lucas still seeking dairy policy consensus for farm bill

Rep. Frank Lucas, R-Okla.

Rep. Frank Lucas

House Agriculture Committee Chairman Frank Lucas, R-Okla., said today at a field hearing in Saranac Lake, N.Y., that he is still seeking “consensus” on dairy policy in the next farm bill and that the bill must also address the needs of specialty crop producers.

“The recent decline in prices coupled with rising production has once again demonstrated the need to improve and modernize our dairy safety net,” Lucas said in an opening statement.

“While I do not expect unanimity among dairy industry participants, I do encourage all industry participants — producers and processors alike — to find some level of consensus regarding the type of reform that is needed.,” Lucas said.

“The exact nature of the reform we include in the next farm bill will rely heavily on the input we receive today and in future hearings,” he said. “While there are several proposals that have been introduced, and we have had some level of agreement on a starting point for discussion, we do not claim to have all of the answers. With your help and guidance, we would hope to develop a comprehensive package of reforms which are fiscally responsible and balanced with regards to size and region.”

Most dairy producer groups are behind a Dairy Security Act introduced by House Agriculture ranking member Collin Peterson, D-Minn. That bill would provide dairy farmers protection against rising input costs and also use federal power to encourage farmers to reduce production temporarily during periods of low prices.

The International Dairy Foods Association, which represents the processors, opposes it on the grounds that its supply management provision will reduce supply and make it difficult to expand export markets. Dairy farmers pressed Congress to write a new dairy program independently of the farm bill, but Lucas said he would not consider a free-standing bill unless there were industry consensus.

The National Milk Producers Federation noted in a news release today that all three dairy producers who testified today backed the Dairy Security Act, which contains many provisions that National Milk backs.

Eric Ooms, a dairy farmer from Kinderhook, N.Y., who is vice president of the New York Farm Bureau, testified that Farm Bureau supports the Dairy Security Act because the supply management component of this proposal is voluntary.

“If an individual producer chooses to limit production and the Federal Government wants to incentivize this, that is the producer’s decision and we support that,” Ooms testified.

Lucas noted that the hearing is the first of four that will be held between today and April 20 and that today’s hearing would focus on dairy and the specialty crops that are important to the Northeast.

“We must develop a farm bill that works for all regions and all commodities,” Lucas said. “We have repeatedly heard that a one-size-fits-all program will not work.”

The hearing was held at a community college in the district of Rep. Bill Owens, R-N.Y., and near the district of Rep. Christopher Gibson, R-N.Y. Lucas chaired the hearing. Owens, Gibson, and Reps. Bob Goodlatte, R-Va., Michael Conaway, R-Texas, David Scott, D-Ga., and Chellie Pingree, D-Maine, also attended to hear the testimony.

Scott Osborn, a grape grower in the Finger Lakes region testified that crop insurance has “improved significantly” for grape growers in the last five years, but that Congress needs to continue the premium subsidy.

“If it costs too much no one will participate,” Osborn said. It would be nice if the harvest deduction ($30) was removed. Currently grape growers are getting hit twice with this cost once when it is subtracted from the indemnity they get and then again by the adjuster.”

Osborn also proposed insurance on new plantings.

“We are a permanent crop,” he said. “Our installation costs are extreme.”

“For example it costs approximately $18,000 per acre to plant an acre of grapes,” he continued. “It is around four years before you get your first harvest. We have to farm it all this time, which runs 4,000 plus an acre each year to farm. So the investment over four years is $30,000.”

“If you add in that we may be removing an under performing variety and replanting for a more profitable variety you are looking at easily a $50,000 investment per acre,” Osborn said. “If there is an environmental event which significantly damages or destroys the new vines we have no way of recouping our investment.”