Senate Approves Agricultural Appropriations Bill with Key Dairy Provision

On September 22, the U.S. Senate approved a $100.7 billion Agriculture Appropriations bill, providing fiscal year 2006 funds for the U.S. Department of Agriculture (USDA) and Food and Drug Administration. In addition to the funding provisions, the bill included an amendment offered by Senators Reid (D-NV) and Kyl (R-AZ) to correct regulatory inequities between federal and state milk marketing orders, a move supported by IDFA and a broad coalition of dairy processors and producers including the National Milk Producers Federation, Western United Dairymen, and the United Dairymen of Arizona.

Specifically, the amendment will close a loophole that allows plants within federal orders to sell fluid milk into state orders without complying with either state or federal pricing regulations. The measure also levels the playing field in Arizona by requiring all processors, including producer-handlers if they sell more than three million pounds of milk per month, to comply with federal pricing rules. The final piece of the amendment will allow Nevada to create a statewide milk marketing order.

"We applaud the Senate for addressing these issues and creating a level playing field for dairy producers and processors who have been hurt by the exploitation of these loopholes," said IDFA Senior Vice President Chip Kunde. "Resolving the problem of out-of-state milk sales is a top priority for IDFA."

During debate on the legislative package, a costly and controversial amendment to extend the Milk Income Loss Contract (MILC) program was filed by Senators Specter (R-PA) and Leahy (D-VT), but the extension was not included in the final bill. Five amendments were filed against the program's extension by Senators Domenici (R-NM), Bingaman (D-NM), Craig (R-ID), Crapo (R-ID) and Cornyn (R-TX).

Although no MILC payments have been made in 2005 because of higher farm milk prices, the expiration of the program on September 30, 2005, is expected to lead to intensifying efforts by supporters in Congress this week to extend the program.

On other dairy-related issues, the Senate's Agriculture Appropriations bill includes amendments to study how the organics industry is impacted by a recent court ruling against USDA's organic standards, and another to allow the producer-funded National Dairy Promotion and Research Board to reallocate funds for dairy emissions research required under the Environmental Protection Agency's Air Quality Compliance Agreement.

None of the dairy provisions mentioned above are included in the House Agriculture Appropriations legislation. The two versions of the bill will now move to a joint House-Senate conference, where the differences will be resolved. Identical to the Senate amendment offered by Sens. Reid and Kyl, House legislation dealing with regulatory inequities between federal and state milk marketing orders will be introduced by Rep. Devin Nunes (R-CA). IDFA will work with allies toward getting this provision enacted during this congressional session.

For more information, contact the IDFA legislative group at 202/737-4332.

Posted September 26, 2005