Dairy Provisions in Senate-Passed Farm Bill

WASHINGTON, June 21 - Sens. Patrick Leahy (D-Vt.) and Bernie Sanders (I-Vt.) said a farm bill that the Senate approved today includes provisions that would help Vermont's family farms. 

One provision would provide insurance to farmers, at modest rates, that would pay them if the price of producing milk falls to $4 dollars above the price of selling milk. Farmers could buy supplemental insurance for a price differential of up to $8. To assist small farmers, the price for this supplemental insurance for the first 4 million pounds - about the annual production of 200-250 cows - would be lower than the price for larger dairies. 

Another provision builds on legislation introduced two years ago when Sens. Leahy and Sanders proposed a ‘supply management' system for dairy farms. 

Dairy prices suffer from wild swings in price.  When prices drop severely, farmers often milk more cows, making the oversupply and lower prices.  The provision in the farm bill would require that participants in the insurance program - which is optional - make a small cut in production of 2 percent to 3 percent when there is an oversupply of milk and prices drop.  

The change should significantly reduce milk oversupply and the large price swings which have been the major cause of the decline in family dairy farms.