Copyright 2002 Journal Sentinel Inc.  
Milwaukee Journal Sentinel (Wisconsin)
April 24, 2002 Wednesday FINAL EDITION
SECTION: NEWS; Pg. 10A

LENGTH: 709 words

HEADLINE: Midwestern dairy farmers 'cautiously optimistic' about farm bill;
House, Senate working on deal that could mean $15,300 a year in payments

BYLINE: KATHERINE M. SKIBA of the Journal Sentinel staff

BODY:
Washington -- As Congress hammers away at a new farm bill, the outlook is "cautiously optimistic" for federal help for Wisconsin dairy farmers, observers say.

This week Senate and House negotiators are expected to continue work on a national dairy program representing a compromise that by one estimate would mean $15,300 a year in payments to state farmers with 100-cow herds. Final numbers aren't yet known.

With an eye to ending regional rivalries in dairy, payments would go to farmers in all states when milk prices sink.

Watching closely is the Midwest Dairy Coalition, which represents dairy interests in eight heartland states.

Steven D. Etka, the coalition's legislative coordinator, said dairy farmers had felt "whipsawed" in the last six years under the 1996 Freedom to Farm Act as milk prices went "from historic highs to lows to highs again."

What resulted in recent years were annual Agriculture Department emergency payments to dairy farmers, which critics called a Band-Aid approach and which the national dairy program aims to make obsolete.

Discussions under way, Etka said, have Midwestern producers "cautiously optimistic."

Those talks, held by House and Senate negotiators, indicate the dairy subsidies would be triggered when the price of Class 1 fluid milk in Boston falls below $16.94 per hundred pounds of milk. When that happens, producers in all regions would receive 45% of the difference between $16.94 and the lower price.

Checks would go out regardless of the so-called class of milk. That is, payments would be made irrespective of whether the milk was bottled for beverage, made into cheese (like most in Wisconsin) or used for butter or non-fat dry powder.

Another form of help for state farmers would be at hand because lawmakers from both chambers seem keen on continuing a $9.90 per hundredweight price-support program. That arrangement has the U.S. buy dairy products from manufacturers for surplus butter, cheese and non-fat dry milk.

Optimism for state

Wisconsin lawmakers, for now, are applauding what appears to be the death of so-called dairy compacts, which they condemn as regional cartels harmful to Wisconsin interests.

Lynn Becker, an aide to Democratic Sen. Herb Kohl, recalled the "bloody battles" over the creation, and, later, the extension, of the Northeast Interstate Dairy Compact.

The arrangement saw six New England states set their own floor price for milk within the region; critics charged that it hurt consumers and spurred overproduction, resulting in depressed prices elsewhere.

The compact since has lapsed; meanwhile, no one is talking openly about resurrecting one and that in itself is "a tremendous stride," Becker said.

The target of the potential dairy subsidies is one issue of disagreement. Negotiators from the Republican-led House have agreed to payments for up to 1.8 million pounds of annual production per farm. That's the per-year output of about 100 cows.

Leading the charge on the Democratic-led Senate side is Vermont's Patrick Leahy, who has complained that that production cap is too low. He favors a 3 million-pound annual cap, roughly the work of 167 cows.

The fate of the overall bill, though, has few people wagering on just when federal lawmakers will put the finishing touches on dairy, what with a whole host of thorny issues still on the table -- from subsidies for commodities such as corn, wheat and soybeans to overall federal payment limitations to individual farmers.

The bottom line? Some $73.5 billion in new agriculture spending over 10 years, something that both Congress and the White House agree upon.

A Leahy aide, who like others during these times of closed-door discussions asked not to be identified by name, said dairy's fate hinged on achieving a overall agreement on the farm bill.

"Nothing's final," he cautioned Tuesday, "until everything is final."

CRITICISM

-- The Midwest Dairy Coalition's legislative coordinator said dairy farmers had felt "whipsawed" in the last six years under the 1996 Freedom to Farm Act.

-- What resulted in recent years were annual Agriculture Department emergency payments to dairy farmers, which critics called a Band-Aid approach.



LOAD-DATE: April 25, 2002