Panel Clears Compromise Dairy Plan

A congressional committee reached a bi-partisan compromise this week to provide U.S. consumers with a steady supply of milk and cheese while lowering the amount taxpayers pay to support dairy farmers.

After a year of what the House Agriculture Committee described as “head-knocking negotiations,” a team of lawmakers Thursday unveiled a plan in Washington, D.C., to cut $500 million to $700 million in federal spending over seven years.

The program also would drop assessments charged to the nation’s 112,000 farmers to offset the government’s purchases of surplus dairy products and support export subsidies. Under the plan, farmers would earn an estimated $900 million more in 1996.

Some producers of bottled milk, ice cream and cheese say their costs will rise, forcing them to charge more at the supermarket. But officials with Seattle-based Darigold Farms doubted that would happen.

“We’re talking about radical change to federal policy, but you’ll be unable to recognize any change in the price of milk at the store,” said Richard Lowe, manager of Darigold Farms, the Pacific Northwest’s largest farm cooperative with 1,100 members.

Leaders of both parties support the dairy program, which was dropped last fall from an omnibus farm bill because it exceeded budget targets. The dairy plan will be reinserted next week into a new farm bill written by the agriculture committee.

The program also would streamline a complicated system of 33 federal marketing orders that adjust prices paid to farmers according to their geographical location. The order for Washington and North Idaho could be expanded to include Utah and other states, Lowe said.

Under the plan, processors would pay farmers no less than the January 1996 blended price for raw milk. That’s about $12 per hundredweight, or roughly $1 a gallon.

Processors opposing the plan say the January benchmark price is too expensive because it represents a five-year high caused by unusual weather and seasonal prices.

, DataTimes