IDFA Concerned over Proposed MILC Extension

The U.S. House of Representatives Appropriations Committee last week approved the Fiscal Year 2007 agriculture spending bill with an amendment that aims to extend the Milk Income Loss Contract (MILC) program through September 2007. The amendment, proposed by Rep. David Obey of Wisconsin, the committee's ranking Democrat, would cost the federal government an additional $79 million.

When Congress extended the costly program last year, they did so only through August 2007, one month before the 2002 Farm Bill expires. With zero funding in the last month, it will be more difficult for Congress to approve the continuation of the subsidy program in the 2007 Farm Bill.

"This amendment is an attempt to keep the milk income loss subsidy alive so it can be incorporated into the new Farm Bill," said Kristin Pearson Wilcox, IDFA vice president for legislative and political affairs. "Rather than continuing another layer of government subsidies, Congress needs to take a broader look at the complex web of federal dairy programs and create a framework that is national in scope, less market disruptive, fiscally responsible and compliant with U.S. trade obligations."

The MILC subsidy co-exists with another safety-net program, the Dairy Price Support Program, which requires the government to buy surplus dairy products at set prices.

"These dueling programs not only create market distortions, signaling inappropriate production decisions relative to market demand, but they cost the government much more than a single, more efficiently structured program," Wilcox said.

The agriculture appropriations bill as amended was approved by voice vote by the full appropriations committee and is expected to reach the House floor for debate this week.

To read more about MILC, click here. For more information, contact Wilcox at kwilcox@idfa.org or 202-220-3508.

Posted May 15, 2006