USDA 2007 Farm Bill Proposals - US Department of Agriculture

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REVISE DAIRY COUNTER-CYCLICAL PAYMENTSAND CONTINUE PRICE SUPPORT PROGRAM FORMILKRecommendation In BriefContinue to support the price of milk at $9.90 per hundredweight (cwt), and re-authorize andrevise the Milk Income Loss Contract Program (MILC). MILC payments would be based on areduced and historical payment rate, instead of actual milk sales. These proposals are estimatedto add $793 million in additional dairy payments over a ten-year period.ProblemOperation of the milk price support program has helped to provide stability to producers’ milkprices. Counter-cyclical payments to dairy producers are triggered under the MILC programwhen the Class I price in Boston in any month falls below $16.94 per cwt. The MILC program isnot consistent with the other farm bill counter-cyclical programs that require payments to bebased on historical production levels and an 85 percent payment rate.Under the 2002 farm bill, authority for the MILC program expired on September 30, 2005. TheDeficit Reduction Act of 2005 extended the MILC program authorizing payments throughAugust 31, 2007, but no payments are authorized thereafter. Because the MILC program expiresprior to expiration of the 2002 farm bill, the MILC program is not part of the 2007 farm billbaseline spending for FY 2008-2017. Thus, a continuation of the program in the 2007 farm billwould cause farm bill program spending to exceed baseline spending.During USDA’s Farm Bill Forums, dairy farmers from throughout the country let their views beknown. For example, Ed from Wisconsin said, “We see the MILC program as an importantsupplement to the milk price support program, which is also an important part of the dairyincome safety net. However, the milk price support program, by itself in its current form, is aninsufficient safety net for dairy producers.” And Calvin from Florida added, “We support thecontinuation of this relatively low cost safety net for dairy farmers…With the large investmentrequired of dairy operations and the time frame required to enter dairy farming it is imperativethat a floor be kept on dairy prices to maintain an adequate milk supply. The dairy price supportprogram is a win-win for producers, processors, and consumers.”Recommended SolutionThe Administration proposes to maintain the milk price support program and extend the MILCprogram. Under the proposed MILC program, dairy producers would continue to be eligible toreceive a payment if the Class I price in Boston in any month falls below $16.94 per cwt. ForFY 2008, the proposed payment rate would remain at the current rate of 34 percent of thedifference between $16.94 per cwt and the Class I price in Boston. For subsequent years, thepayment rate would be phased down to 31 percent in FY 2009, 28 percent in FY 2010, 25percent in FY 2011, 22 percent in FY 2012, and 20 percent in FY 2013-2017.USDA 2007 Farm Bill Proposals Page 26 of 183
MILC payments would be based on 85 percent of the 3-year average of milk marketed duringfiscal years 2004-06. Payments would be subject to the current quantity-based limit on milkmarketed eligible for MILC payments of 2.4 million pounds per year. This policy change wouldmake the MILC program consistent with the other farm bill counter-cyclical programs that arecalculated on historical production bases. MILC payments would also count towards aproducer’s overall counter-cyclical payment limit of $110,000 annually, helping to limitpayments to producers with multiple dairy operations. The new adjusted gross income eligibilitycap of $200,000 annually would also apply to MILC payments.BackgroundThe Milk Price Support Program (MPSP) supports the price of milk produced in the 48contiguous states through the purchase of cheese, butter, and nonfat dry milk (NDM). Thecurrent milk price support rate is $9.90 per cwt. for milk testing 3.67 percent butterfat (milk fat).Under the MPSP, farmers are not paid directly but are supported through Federal purchases ofdairy products. Purchases vary from year to year depending on the dairy market supply anddemand situation and the support rate.In recent years, the average price received for milk has been well above the support price andonly very small amounts of nonfat dry milk, butter and cheese have been removed from themarket to support the price of milk. Current projections suggest that the farm-level price of milkwill continue to remain considerably above the support price and purchases under the milk pricesupport program will remain small.Besides MPSP, the MILC program is also available to dairy producers. MILC program paymentsare made on a monthly basis when the Class I milk price in Boston falls below the benchmarkprice of $16.94 per cwt. A maximum of 2.4 million pounds of milk marketed by an operationare eligible for MILC payments per fiscal year. MILC program payment rates are currentlydetermined by multiplying 34 percent of the difference between $16.94 and the Boston Class Iprice for the month. By statute, no payments are authorized under the MILC program afterAugust 31, 2007.USDA 2007 Farm Bill Proposals Page 27 of 183
Page 1 and 2: United States Department of Agricul
Page 3 and 4: Title IV - Nutrition Programs Tab 4
Page 5 and 6: TITLE ICOMMODITYPROGRAMSUSDA 2007 F
Page 7 and 8: prices…Let free market principles
Page 9 and 10: REVISE MARKETING ASSISTANCE LOANSRe
Page 11 and 12: panel has been established to rule
Page 13 and 14: BackgroundProducers may receive a n
Page 15 and 16: Additionally, to avoid jeopardizing
Page 17 and 18: BackgroundThe Direct Payment Progra
Page 19 and 20: If a payment is triggered, the nati
Page 21 and 22: STRENGTHEN PAYMENT AND ELIGIBILITY
Page 23 and 24: BackgroundA limitation on the total
Page 25: Recommended SolutionTo help rectify
Page 29 and 30: program. On January 1, 2008, full i
Page 31 and 32: Europe (USNE). The decision concern
Page 33 and 34: market signals and what was in thei
Page 35 and 36: yield. Therefore, the amount of dir
Page 37 and 38: continue to receive the direct paym
Page 39 and 40: 2. Successor Agreements. -- For pur
Page 41 and 42: SUMMARY OF CONSERVATION TITLE REFOR
Page 43 and 44: ENVIRONMENTAL QUALITY INCENTIVESPRO
Page 45 and 46: development of innovative practices
Page 47 and 48: existing resource concerns to the s
Page 49 and 50: PRIVATE LANDS PROTECTION PROGRAMRec
Page 51 and 52: CONSERVATION RESERVE PROGRAMRecomme
Page 53 and 54: WETLANDS RESERVE PROGRAMRecommendat
Page 55 and 56: IMPLEMENT “SOD SAVER” TO DISCOU
Page 57 and 58: CONSERVATION ACCESS FOR BEGINNING A
Page 59 and 60: MARKET-BASED APPROACH TO CONSERVATI
Page 61 and 62: MERIT-BASED FUNDING ALLOCATIONRecom
Page 63 and 64: farmland, which may include debris
Page 65 and 66: SUMMARY OF TRADE TITLE REFORMRecomm
Page 67 and 68: EXPAND TECHNICAL ASSISTANCE FOR SPE
Page 69 and 70: ENHANCE THE MARKET ACCESS PROGRAMRe
Page 71 and 72: GRANT PROGRAM TO ADDRESS SANITARY A
Page 73 and 74: TECHNICAL ASSISTANCE TO RESOLVE TRA
Page 75 and 76: TRADE CAPACITY BUILDING AND AGRICUL
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ecent years, and repeal of the spec
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REPEAL THE EXPORT ENHANCEMENT PROGR
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PROVIDE CASH AUTHORITY FOR PORTION
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TITLE IVNUTRITIONUSDA 2007 Farm Bil
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accountable for these errors. (For
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FOOD STAMP PROGRAM:Working Poor and
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a statistically valid sample of Sta
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have driven implementation of syste
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problem, and there are few opportun
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FOOD STAMP PROGRAM:IMPROVING HEALTH
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THE EMERGENCY FOOD ASSISTANCE PROGR
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FOOD DISTRIBUTION PROGRAM ON INDIAN
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SENIOR FARMERS’ MARKET NUTRITION
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PROMOTING HEALTHFUL DIETS IN SCHOOL
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TITLE VCREDITUSDA 2007 Farm Bill Pr
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Eliminate the $250,000 cap on the v
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3. Unmet SDA or beginning farmer ne
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downpayment loan amount of $200,000
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meet the credit needs of an increas
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SUMMARY OF RURAL DEVELOPMENT TITLER
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ADDRESS BACKLOG OF RURAL CRITICAL A
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ENHANCING RURAL INFRASTRUCTURERecom
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USDA’s community facilities progr
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program; and consolidate the Sectio
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SUMMARY OF RESEARCH TITLE REFORMRec
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RESEARCH, EDUCATION AND ECONOMICS (
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AGRICULTURAL BIOENERGY AND BIOBASED
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SPECIALTY CROP RESEARCH INITIATIVER
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FOREIGN ANIMAL DISEASE RESEARCHReco
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SUMMARY OF FORESTRY TITLE REFORMRec
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COMPREHENSIVE STATEWIDE FOREST PLAN
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FOREST WOOD TO ENERGYRecommendation
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COMMUNITY FORESTS WORKING LANDSPROG
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SUMMARY OF SUPPORT OF RENEWABLEENER
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CELLULOSIC BIOENERGY PROGRAMRecomme
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EXPANSION OF BIOBASED PRODUCTS MARK
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SUMMARY OF MISCELLANEOUS TITLE REFO
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CROP INSURANCESUPPLEMENTAL DEDUCTIB
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payment. If the county yield is 80
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ACCESS TO CROP INSURANCEDATA MINING
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STRENGTHEN CROP INSURANCEPROGRAM CO
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CROP INSURANCERESEARCH AND DEVELOPM
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CROP INSURANCESTANDARD REINSURANCE
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INCREASE CROP INSURANCE PARTICIPATI
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ENSURING FAIRNESS OF DAIRY RESEARCH
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plan crop plantings and make market
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USDA would also consider offering v
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SUMMARY OF SPECIALTY CROP SUPPORTRe
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Reauthorize the Emergency Food Assi
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SUMMARY OF SUPPORT OF BEGINNING FAR
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SUMMARY XIIISOCIALLYDISADVANTAGEDPR
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eginning farmers buying power by in
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ADMINISTRATION'S FARM BILL PROPOSAL
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ADMINISTRATION'S FARM BILL PROPOSAL
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USDA 2007 Farm Bill Proposals - US Department of Agriculture

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