June 20, 2007 sees Congressional Record publish “INTRODUCTION OF THE NATIONAL DAIRY EQUITY ACT OF 2007”

June 20, 2007 sees Congressional Record publish “INTRODUCTION OF THE NATIONAL DAIRY EQUITY ACT OF 2007”

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Volume 153, No. 100 covering the 1st Session of the 110th Congress (2007 - 2008) was published by the Congressional Record.

The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.

“INTRODUCTION OF THE NATIONAL DAIRY EQUITY ACT OF 2007” mentioning the U.S. Dept of Agriculture was published in the Extensions of Remarks section on pages E1348 on June 20, 2007.

The publication is reproduced in full below:

INTRODUCTION OF THE NATIONAL DAIRY EQUITY ACT OF 2007

______

HON. JOHN M. McHUGH

of new york

in the house of representatives

Tuesday, June 19, 2007

Mr. McHUGH. Madam Speaker, I rise today with my colleague from New York, Mr. Reynolds, to introduce the National Dairy Equity Act of 2007, NDEA, which is designed to establish a minimum price for fluid milk and create a market-based safety net for dairy farmers.

I greatly appreciate the men and women who work the extremely hard and long hours needed to produce milk, butter, cheese, ice cream, non-

fat dry milk, and yogurt. Thus, I would like to begin by noting that June is Dairy Month. It is hard to overstate how important dairy is to the United States economy, nor for that matter, how important dairy is to the economies of New York and its 23rd Congressional District, which I represent. In fact, in 2006, New York was the Nation's third largest dairy State; it accounted for about 7 percent (638,000 head) of the nation's milk cows, 6.7 percent (12.04 billion pounds) of total milk production, and 6.9 percent ($1.6 billion) of total cash receipts from milk marketing. The importance of dairy to New York's 23rd District is readily apparent when one considers that the 2002 Census of Agriculture reported there were 1,989 dairy farms with 188,305 milk cows in the 11 counties that comprise the district.

I also appreciate the fact that the Milk Income Loss Contract, MILC, has provided about $230 million in much-needed support to New York dairy farmers over the past 5 fiscal years and I know my constituent farmers do as well. Moreover, it is critical that the 2007 Farm Bill continue to provide dairy farmers with some form of income support. While I appreciate the support provided through MILC, the NDEA is an alternative that could help to provide additional support to American farmers with greater stability and at less cost to the taxpayer.

The NDEA would establish 5 Regional Dairy Marketing Areas, RDMA; the Intermountain, Midwest, Northeast, Pacific, and Southern. The Midwest, Northeast, and Southern regions would automatically be included as participating regions while the Intermountain and Pacific regions would have the ability to opt into the program.

In each region, a Regional Dairy Board would establish the minimum or over-order price for Class I (fluid) milk; that price would then have to be approved by farmers through a referendum. In the first year, the maximum price that a board could establish is capped at $17.50 per hundredweight (cwt.), but thereafter the price could rise based on the Consumer Price Index, CPI.

Under the NDEA, when the Class I milk price in the Boston market falls below the established minimum price, processors would pay an over-order premium--the difference between the minimum price set by the applicable Regional Dairy Board and the Boston Class I price--into a national fund. The U.S. Secretary of Agriculture would then distribute the monies in the fund back to the Boards according to a formula whereby each region would get back the greater of what they pay into the fund or the amount of the over-order payments a region would have generated if it had a Class I utilization rate of 50 percent. In the event of a shortfall, the Secretary would supplement the money in the fund from savings from the MILC program to ensure that the Regional Dairy Boards, and subsequently the dairy farmers themselves, would receive the full payments.

The Regional Dairy Boards would be comprised of three members from each participating state in a particular region. The U.S. Secretary of Agriculture would make the nominations to the Boards after receiving nominees put forward by governors or elected state agricultural commissioner after consultation with the dairy industry. Each State delegation to the Regional Dairy Boards would consist of 3 representatives, with at least 1 producer and 1 consumer.

In addition to the responsibility to establish minimum prices and distribute payments to dairy farmers, the Regional Dairy Boards would have the authority to conduct supply management programs when necessary, including the development of incentive-based programs. Moreover, in order to prevent overproduction, regions in which the growth in milk production is higher than the national average would be required to reimburse the U.S. Secretary of Treasury for the cost of government dairy surplus purchases up to the amount that the region is receiving under the NDEA.

It is important to note that the NDEA would not establish national pooling. Rather, it would create an equalization fund whereby processor paid funds would go to a central account at the U.S. Department of Agriculture; Government funds would be added to that fund and then payments would be made to the various regions according to a formula, which would permit regions with low Class I utilization to receive the same benefit as those regions with higher utilization.

Also of significance, the NDEA would be entirely optional for the States and individual farmers. Thus, those states that do not wish to participate in the NDEA program could simply choose to continue to participate in the MILC program, which the NDEA would extend to 2012, and individual farmers in States participating in the new NDEA program could instead opt to merely continue receiving payments under their current MILC contract rather than under the NDEA. However, those individuals would not be eligible to extend their MILC contract beyond September 2008 and would lose all future eligibility to participate in the NDEA program.

Madam Speaker, the NDEA would create a market-orientated, counter-

cyclical program to help all of our Nation's dairy farmers while simultaneously saving taxpayers money. Accordingly, I ask my colleagues to join with me to enact this important legislation.

____________________

SOURCE: Congressional Record Vol. 153, No. 100

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