I

106TH CONGRESS

2D SESSION H. R. 5051

To provide direct payments to dairy producers for any month in which

the prices received by milk producers for milk for the preceding three

months is less than a target price of $12.50 per hundredweight.

IN THE HOUSE OF REPRESENTATIVES

JULY 27, 2000

Mr. KIND (for himself, Mr. OBEY, Ms. BALDWIN, Mr. HOUGHTON, Mr. SANDERS, and Mr. BALDACCI) introduced the following bill; which was referred

to the Committee on Agriculture

A BILL

To provide direct payments to dairy producers for any month

in which the prices received by milk producers for milk

for the preceding three months is less than a target

price of $12.50 per hundredweight.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘National Family Farm

5 Dairy Equity Act of 2000’’.

6 SEC. 2. DIRECT PAYMENTS TO DAIRY PRODUCERS TO OFF7 SET LOW MILK PRICES.

8 (a) DEFINITIONS.—In this section:
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1 (1) AVERAGE MILK PRICE.—The term ‘‘average

2 milk price’’ means the average price under the Fed3 eral milk marketing orders of Class III milk (or milk

4 used to produce cheese) and Class IV milk (or milk

5 used to produce butter and nonfat dry milk) for the

6 preceding three-month period.

7 (2) CLASS I MILK.—The term ‘‘Class I milk’’

8 means milk classified as Class I milk under a Fed9 eral milk marketing order.

10 (3) CLASS II MILK.—The term ‘‘Class II milk’’

11 means milk classified as Class II milk under a Fed12 eral milk marketing order.

13 (4) CLASS III MILK.—The term ‘‘Class III

14 milk’’ means milk classified as Class III milk under

15 a Federal milk marketing order.

16 (5) CLASS IV MILK.—The term ‘‘Class IV

17 milk’’ means milk classified as Class IV milk under

18 a Federal milk marketing order.

19 (6) FEDERAL MILK MARKETING ORDER.—The

20 term ‘‘Federal milk marketing order’’ means a milk

21 marketing order issued under section 8c of the Agri22 cultural Adjustment Act (7 U.S.C. 608c), reenacted

23 with amendments by the Agricultural Marketing

24 Agreement Act of 1937.
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1 (7) SECRETARY.—The term ‘‘Secretary’’ means

2 the Secretary of Agriculture.

3 (8) TARGET PRICE.—The term ‘‘target price’’

4 means $12.50 per hundredweight for milk con5 taining 3.67 percent butterfat.

6 (b) PAYMENTS REQUIRED.—The Secretary shall

7 make a payment under this section to producers on a farm

8 for any month in which the average milk price applicable

9 to that month is less than the target price. Producers shall

10 be eligible for payments regardless of whether they market

11 their milk within the Federal milk marketing order sys12 tem. Payments for producers operating outside the Fed13 eral order system shall be calculated to be equivalent to

14 payments for producers operating within the Federal

15 order system.

16 (c) AMOUNT OF PAYMENT.—Subject to subsection

17 (d), the amount of the payment to be made to producers

18 on a farm under subsection (b) for a month shall be equal

19 to the following:

20 (1) The difference between the target price and

21 the average Class III milk price multiplied by the

22 percentage of milk used as Class III milk of the

23 total amount of milk marketed by the producer, as

24 determined by the Secretary.
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1 (2) The difference between the target price and

2 the average Class IV milk price multiplied by the

3 percentage of milk used as Class IV milk of the total

4 amount of milk marketed by the producer, as deter5 mined by the Secretary.

6 (3) The difference between the target price and

7 the average Class I milk mover multiplied by the

8 percentage of milk used as Class I milk of the total

9 amount of milk marketed by the producer, as deter10 mined by the Secretary.

11 (4) The difference between the target price and

12 the average Class II milk price multiplied by the

13 percentage of milk used as Class II milk of the total

14 amount of milk marketed by the producer, as deter15 mined by the Secretary.

16 (d) LIMITATIONS.—

17 (1) PAYMENT LIMITATION.—Maximum pay18 ments under this section for a calendar year may

19 not exceed $50,000 per farm.

20 (2) QUANTITY LIMITATION.—The producers on

21 a farm shall be eligible for payments under this sec22 tion for a month for not more than the smaller of

23 the following:

24 (A) The producers’ average monthly pro25 duction, determined using the production dur-
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1 ing the previous calendar year and the current

2 calendar year.

3 (B) 216,666 pounds produced monthly.

4 (C) Some other production base for the

5 farm considered appropriate by the Secretary.

6 (3) NEW PRODUCERS.—In the case of pro7 ducers on a farm who do not have a production base

8 for the previous calender year, the quantity limita9 tion otherwise applicable under paragraph (2)(A)

10 shall be based on current monthly production only.

11 (4) TRANSFER OF PRODUCTION BASE.—There

12 is no restriction on the ability of the producers on

13 a farm to transfer the production history determined

14 under paragraph (2)(A) for the farm as part of the

15 transfer of the ownership of the farm.

16 (e) TIME FOR PAYMENTS.—Payments required under

17 this section for a month shall be made not later than the

18 21st day after the end of the month.

19 (f) FARM RECONSTITUTION.—The Secretary shall

20 carry out this section in such a manner that there are

21 no additional outlays under this section as a result of the

22 reconstitution of a farm that the Secretary determines oc23 curred in whole or in part for the purpose of increasing

24 the amounts received as payments under this section.
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1 (g) ADMINISTRATION; FUNDING SOURCE.—The Sec2 retary shall carry out this section using the funds, facili3 ties, and authorities of the Commodity Credit Corporation.

4 (h) PERIOD OF EFFECTIVENESS.—This section shall

5 be effective only during the period beginning on January

6 1, 2001, and ending on December 31, 2005.

7 (i) COMPTROLLER GENERAL REPORT.—Not later

8 than three years after the date of the enactment of this

9 Act, the Comptroller General shall submit to Congress a

10 report that analyzes the effect of the operation of this sec11 tion on farm income, milk production levels, milk prices,

12 and Government and consumer costs.

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