Dairy Subsidies and SNAP Reductions

The Farm Bill, the $956 billion legislation that keeps food prices stable and pantries stocked, passed the Senate on Tuesday, Feb. 4 and is expected to be signed into law after press time on Friday, Feb. 7. The bill had been tied up in the legislature since the last one expired in 2012.

“We’re just happy to have a Farm Bill being passed,” said Darin Von Ruden, president of the Wisconsin Farmers Union. “It’s been a little frustrating over the last couple of years with the extensions and not getting this done.”

The 2014 Farm Bill cut some programs and consolidated others, and will reduce the deficit by $23 billion, according to the House-Senate Conference Committee’s Farm Bill overview.

Von Ruden was happy to see the bill require farmers to conserve resources in order to get federal subsidies, and help farmers fund renewable energy projects.

Unlike past Farm Bills, this bill doesn’t limit the amount of milk farmers can produce, which Von Ruden worries could lead to too much supply and unstable prices for farmers and consumers.

Von Ruden also wanted to see lower payment limits to farmers. Farmers can currently get payments from crop insurance and other subsidies for farms that make up to $750,000, and that number will rise to $900,000 under the new bill.

“It went the wrong way,” Von Ruden said. “We were hoping it would drop down to $150,000 or even $200,000. Our thoughts and theory on that is if farmers want to expand and get larger, it shouldn’t be the taxpayers that have to pay for that. That should be their own risk rather than taxpayers’ risk.”

MILC Program Replaced

The Milk Income Loss Contract (MILC) program, which compensates dairy farmers when domestic milk prices are low and feed prices are high, will be phased out by September 2014. It will be replaced with a Margin Protection Program, which pays farmers the difference between average U.S. milk prices and average feed costs based on what level of insurance they purchased for their milk.

“Farmers are going to have to make decisions in the next six to 10 months on what level of insurance they want to be involved in,” Von Ruden said.

Brian Gould, a professor at the Department of Agriculture and Applied Economics at the University of Wisconsin – Madison, doesn’t expect any MILC payments this year since the price of milk has been high and the price of cow feed low.

“We’ve got some tight supplies of product, but also our export demand is continuing to increase,” Gould said. “In 2013 more than 15 percent of our milk solids were exported…It’s been a significant increase and that’s picking up the slack. We’re doing a better job of exporting our product and I think that’s primarily the reason we have these relatively high prices.”

Gould and Von Ruden are not sure if insurance payments will make up for MILC payments.

“I guess some people say it will, but I’m not convinced of that,” Gould said. “I would say I’m cautiously optimistic but unsure.”

The MILC program was good for Wisconsin farmers because there was a limit to the amount of money farmers could receive. Big dairy farms, like many in California, hit that limit early in the year, while smaller Wisconsin farms got payments all year, Gould said.

SNAP Benefits Reduced

The Farm Bill cut the country’s Supplemental Nutrition Assistance Program (SNAP) by $8 billion after 10 years by stopping lottery winners from receiving benefits, changing the way states give heating assistance and investing in job training programs.

Local experts don’t know how the bill will affect Door County, where 2,623 people participated in the FoodShare program in December 2013. FoodShare is Wisconsin’s version of SNAP.

“It’s the unknown that makes it so unnerving,” said Jennifer Spude, Door County nutrition coordinator. “This has been years. And with our nutrition program we had colleagues around the nation, if they didn’t have backup funds they were done.”

The county’s nutrition program helps FoodShare participants learn to stretch their food budgets. Nutrition educators teach cooking and food preservation classes, set up community gardens and helped get FoodShare money accepted at farmers markets.

It’s funded by SNAP money and run through the University of Wisconsin – Extension. Farm Bill delays meant no federal money to support the program, so UW-Extension and the state Department of Human Services supported it until the 2014 Farm Bill passed.

“If the Farm Bill doesn’t pass, then our program doesn’t exist after March 31,” Spude said. “We receive that federal funding and we’ve been floated by the last six months by Extension and the Department of Human Services.”