A new margin insurance program is in the final version of the farm bill to be voted on today by the House of Representatives, and Rep. William L. Owens said he believes dairy farmers across the north country will be pleased with the result.
Mr. Owens, D-Plattsburgh, will vote in favor of the five-year farm bill, but he was unsure Tuesday whether the legislation would collect enough votes from House Republicans to be approved. That would clear the way for a vote by the Democratic-led Senate by Friday. The final bill was reconciled Monday by a bipartisan committee of legislators from the House and Senate.
Its expected to be controversial among House Republicans who would like deeper cuts in food stamps than the $8 billion reduced over the next 10 years. Thats an increase from the $4.5 billion previously approved by the Senate, yet a far cry from the $39 billion approved by the House.
Im hoping the vote will be approved by a minimum of 150 Republicans and 150 Democrats, Mr. Owens said.
The new margin insurance program, crafted to provide extra assistance to small dairy farms, was created after the abandonment of the hotly contested Dairy Security Act in the Senate bill that would have penalized farmers for overproducing milk.
The new program would make payments to farmers when the national margin the average milk price minus average feed costs drops below a certain amount based on insurance premiums bought by farmers. Those premium rates would be cheaper for small dairy farms with 200 or fewer cows, while larger farms would pay more. For the first two years of the five-year program, the cost for smaller farms would be reduced by 25 percent of the established rates for the first 4 million pounds of milk production.
To help manage the national milk supply, the program would set an annual production limit on the amount of milk that each farm may insure. This year, that limit would be calculated based on the highest annual milk production per farm from either 2011, 2012 or 2013. For each subsequent year, the production limit would be adjusted based on the percentage that national milk production increases. Farmers would have the option to provide coverage for 25 to 90 percent of their annual milk production. They could insure margins ranging from $4 to $8 per hundredweight, in 50-cent increments.
The program would take effect Sept. 1. In the interim, the Milk Income Loss Contract program that expired last fall would be reinstated.
Mr. Owens said he would have preferred the abandoned supply management program to be included in the bill. But he said the revised insurance program will function in a similar manner, because farmers will be discouraged from expanding milk production rapidly. Ultimately, the goal of the program is to stabilize milk prices and avert major swings in the national market, he said.
Its possible that this may be a disincentive to growth. But if a farmer elects to go in that direction, then the person is going to be willing to take a risk, and they would still have insurance coverage available, he said.
If the farm bill is approved this week, it will mark the conclusion of what has been a long three-year fight by Mr. Owens to get the job done.
This has been a process that I have found to be increasingly frustrating, said Mr. Owens, who announced earlier this month that he wont seek re-election in the fall. The farmers in our district have been increasingly frustrated, and to some extent its been an embarrassment to me that Congress could not get it done earlier.
During a conference call Tuesday with reporters, Sen. Charles E. Schumer, D-N.Y., lauded the margin insurance program for providing inexpensive insurance premiums for small dairy farms. Because the average herd size on dairy farms across the state is 120 cows, the majority of farmers will benefit from more affordable premiums, he said.
On the dairy side, I think most people agree this is an improvement, Mr. Schumer said. Its an improvement for small farmers, who are particularly protected if they have under 200 cows. Our producers are also much happier with this than the previous proposal.
The bill also expands crop insurance funding for fruit and vegetable growers, Mr. Schumer said, and includes a bill that he spearheaded called the Maple Tap Act. The program would provide grants from the U.S. Department of Agriculture of up to $20 million per year to states that create programs to boost maple production.