The National Milk Producers Federation this month urged continued support of the Senate's Dairy Security Act.
The controversial DSA includes margin insurance and a program that uses milk payments to communicate market conditions to farmers. Opponents of the plan call the stabilization element "supply management," noting that producers must limit production if certain market conditions arise to keep milk prices steady.
The International Dairy Foods Association, an opponent of the plan, says the program could hurt global competition and be confusing to operate.
Even so, NMPF points out that the program is specifically designed to offer dairy farmers help when they desperately need it: when margins between farm milk prices and production costs shrink to dangerous levels.
Equally important, they say, the DSA is designed to limit taxpayers' liability through the stabilization mechanism, which helps farm milk prices recover more quickly.
Noting that individual farmers can decide whether or not to participate in the dairy program, the groups said in an October letter to farm bill conferees that the "DSA is a voluntary program that protects producers and keeps taxpayer costs in check. Contrary to the gross distortion pedaled by DSA's opponents during the House debate, the plan doesn't increase retail milk prices. It is designed merely to keep farm milk prices from staying too low for too long, conditions that put 2,000 dairy farms out of business in 2009."
NMPF COO Jim Mulhern added in the letter it is critical that farm bill conferees adopt the Senate dairy provisions in order to protect dairy farmers, provide greater stability to dairy markets and protect taxpayers.
"Without the DSA's market stabilization program, dairy farmers will continue to suffer periods of unsustainably low prices, even as taxpayers will subsidize processors by keeping milk prices artificially low through margin insurance that blunts the market signals contained in the market stabilization component," he said.
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