According to NPR, the proposal, set to be voted on by the House this week, would allow farmers to purchase "a new kind of insurance that pays out when the gap between the price they receive for milk and their feed costs narrows." The program is voluntary, but farmers who participate "would have to sign up for a stabilization program that could dictate production cuts when oversupply drives down prices." But it's dividing lawmakers, and some say it could upset the entire farm bill vote.
In theory, the program would help break the cycle where milk prices drop and farmers overproduce, which floods the market and drives down the price even more so. House Speaker John Boehner compared the policy to communism, calling it "Soviet-style," reports NPR. He is backing an amendment that would scale back the program significantly.
From the Organic Authority Files
Back in 2009, a number of the nation's dairy producers went out of business after feed costs rose and milk prices dropped. The new program would help reduce the impacts on farmers when market prices for milk and feed saw fluctuations.
Along with top Democrat on the House Agriculture Committee, Rep. Collin Peterson of Minnesota, the National Milk Producers Federation, the nation's largest dairy producer organization, has asked its members to support the amendment. Its efforts are being countered by the International Dairy Foods Association, which says the program will drive up prices for dairy products across the board (the IDF represents milk, cheese and and ice cream producers).
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