Participation in DMSP would require dairy producers to pay an annual administrative fee ($100 to $2,500 depending on total annual milk production) and scale back milk production when specific IOFC trigger points are reached.

In DMSP as IOFC falls below $6 per hundredweight participating dairy producers are limited in the amount of milk they can market. The limits on milk marketing increase as IOFC declines.

To view the details of the DMSP please refer to the Congressional Research Service publication Dairy Proposals in the 2012 Farm Bill.

The Dairy Freedom Act (DFA), more commonly known as the Goodlatte and Scott Amendment (named for its sponsors, Congressmen Bob Goodlatte (R-Va.) and David Scott (D-Ga.), is essentially identical to the Dairy Security Act (DSA) with the exception that DFA does not contain DMSP or DPMPP.

However, DFA replaces DPMPP with a new “Dairy Producer Margin Insurance Program.” Thus DFA would allow dairy producers the option for annual enrollment in a new margin insurance program that would essentially allow guaranteed IOFC from $4 to $8 in 50 cent increments.

Like the DSA, DFA removes the DPPSP, MILC and DEIP and reauthorizes the 1996 Federal Milk Marketing Order provisions.

A recent study by agricultural economists at the University of Missouri compared DSA and DFA as if they had been in effect from 2009 to 2012. The study indicated both proposals would have increased dairy producer net revenue over the period with DSA up 55 cents per hundredweight and DFA up by 48 cents per hundredweight.

However, the study indicated that DFA would have increased costs to taxpayers by about $1 billion in comparison to DSA.

Other effects included decreased dairy exports under DSA as compared to DFA. Total national milk production under the two programs would have been “virtually unchanged,” however, under DFA there would have been a few instances of short-term reductions in milk supplies up to 3 percent.

On the contrary, according to the Congressional Budget Office, implementing DFA would cost slightly less than implementing DSA with DMSP.

As a Michigan State University Extensioneducator who has witnessed the process of several farm bills, I think that conventional wisdom says the current version of the farm bill with DSA will likely pass the full Senate.

However, passage of a farm bill containing DSA is less likely to pass the full House.

Also, it is quite likely the House and Senate versions of the farm bill will require major reconciliation as there are wide differences between the two chambers when it comes to funding of the Food Stamp program, known technically as the Supplemental Nutrition Assistance Program (SNAP). The SNAP aspect of the farm bill accounts for more than 70 percent of farm bill spending.

Currently the Senate proposes to cut SNAP spending over the next 10 years by $4 billion while the House proposes to cut $20.5 billion.

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