MILC Gets Spilled During Senate Ag Committee Budget Negotiations

Cost of provision to extend Milk Income Loss Contract program gains negative attention from committee senators.

Published on: Oct 14, 2005

The Chairman of the Senate Agriculture Committee, Saxby Chambliss of Georgia, tried last week to get his committee to approve a series of future budget cuts worth $3 billion, but his proposal failed to gain traction in part because it contained a two-year extension of the Milk Income Loss Contract program.

The MILC program, which expired at the end of September, would be extended retroactive to the beginning of October 2005 under the Chambliss proposal, although his extension cuts the payment rate from 45% to 34% of the difference between $13.69/cwt., and the monthly Class I price mover if the latter is lower.

But because the budget package also contained cuts for conservation, nutrition program and other commodities, controversy over the Chambliss offer resulted in the cancellation of committee deliberations on it.

"Some committee senators said they were concerned at the cost of extending the MILC program at the expense of other commodity programs," Chambliss said in a statement.

"There is strong support for this countercyclical dairy program among both parties within this committee, but it does not appear there is the support that is necessary."

Chambliss says, "This committee is still required to choose where $3 billion in 5-year deficit reduction cuts will come from. As a committee, we must participate with other committees that are cutting the budget, or we lose the right to choose our cuts when the Congress votes on budget reconciliation."

The Agriculture Committee budget effort is part of a larger effort by House and Senate leaders to reduce future spending as a way to trim the federal budget deficit. The reconciliation meeting originally scheduled for Oct. 6 has been changed to Oct. 19. at 10 a.m.