The 2018 Farm Bill expires in September, so work to craft a new five-year farm bill is well underway on Capitol Hill. Given the continuing partisan divide in Washington, manifested by a slim Democratic majority in the Senate and a slight Republican majority in the House, passing a new Farm Bill will be challenging in the current political environment.
It wasn’t that long ago that Farm Bills were viewed as relatively non-controversial and were routinely enacted with significant bipartisan congressional support. That’s generally because Republican members of Congress who represented rural districts were supportive of the commodity programs in the bill, and Democratic members representing urban districts were supportive because the bill funded the Supplemental Nutrition Assistance Program (SNAP), which is relied upon by many of their constituents.
Unfortunately, political partisanship has increased significantly over the past two decades. To get the 2023 Farm Bill across the finish line during the current Congress will require support from members in both political parties, as well as a diverse coalition of stakeholders who historically have banded together to support the commodity and nutrition programs that make up the core of every farm bill. IDFA is engaging with like-minded partners and key members of Congress to ensure that our organization’s policy priorities are included in the next Farm Bill.
First, we are asking Congress to reauthorize and expand the Healthy Fluid Milk Incentives Projects program. This program requires USDA to test different methodologies to encourage participants in SNAP to purchase more dairy products. Under the program, when a SNAP beneficiary uses their benefits to purchase qualifying fluid milk, they receive a dollar-for-dollar coupon that can be used to purchase more fluid milk or another qualifying dairy product. To date, Congress has appropriated $9 million for this program, funding more than 160 pilots in grocery and convenience stores in rural and urban parts of the country with another 160 pilots expected to launch later this year.
In the next Farm Bill, we hope that Congress will agree to expand this program to include yogurt and cheese products, as well as additional fluid milk options. Expanding the program would help more SNAP families achieve positive health outcomes by increasing their dairy consumption.
Our next policy priority would require the USDA to conduct regular cost of processing studies that will generate data for stakeholders to use so they can develop proposals to adjust make allowances. Current make allowances have not been adjusted in more than 16 years, and as a result, they don’t accurately reflect the cost of manufacturing today’s dairy products. Our industry is in this position in large part because the USDA has only commissioned two cost surveys since the turn of the century.
Congress can improve the current ad hoc system by directing the USDA to conduct more regular cost of processing studies. In addition, Congress should require dairy plants that already report pricing data to the USDA to participate in these cost surveys. This will ensure that the resulting data reflects plants of different sizes and in different regions of the country.
Finally, IDFA will ask Congress to permanently authorize the Dairy Forward Pricing Program. This program allows producers to enter into forward price contracts with milk buyers for milk used to manufacture Class II, III, or IV products. Current authority for this program expires on Sept. 30,, which means that no forward price contracts may be entered into after that date.
Given that this program has nearly universal support among dairy stakeholders, we would recommend that Congress make this program permanent to make it an even more attractive risk management tool for our industry.
Enactment of a new Farm Bill that includes these policy improvements will benefit the entire dairy industry. We will keep you apprised.