I
107TH CONGRESS
1ST SESSION
H. R. 1878
To provide supplemental payments to dairy producers based upon their annual
milk marketings and to provide additional payments to dairy producers
for any month in which the prices received by producers for milk for
the preceding three months is less than a target price of $12.50 per
hundredweight.
IN THE HOUSE OF REPRESENTATIVES
MAY 16, 2001
Mr. KIND introduced the following bill; which was referred to the Committee
on Agriculture
A BILL
To provide supplemental payments to dairy producers based
upon their annual milk marketings and to provide addi-
tional payments to dairy producers for any month in
which the prices received by producers for milk for the
preceding three months is less than a target price of
$12.50 per hundredweight.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘National Family Farm
Dairy Equity Act of 2001’’.
SEC. 2. DIRECT PAYMENTS TO DAIRY PRODUCERS BASED
ON ANNUAL MILK MARKETINGS.
(a) PAYMENTS REQUIRED.—The Secretary of Agri-
culture shall make payments under this section to quali-
fied producers on a farm for milk produced in the United
States and marketed by the producers for commercial use.
(b) AMOUNT OF PAYMENT.—Subject to the produc-
tion limitations in subsection (c), the total amount paid
to producers on a farm under this section for a calendar
year shall be equal to $0.50 per hundredweight on the
smaller of—
(1) the producers’ total milk production during
that calendar year; and
(2) 2,600,000 pounds.
(c) PRODUCTION AGREEMENT.—To be eligible to re-
ceive a payment under this section, the producers on a
farm shall enter into an agreement with the Secretary to
limit total milk marketings from the farm during the cal-
endar year to not more than the sum of—
(1) the base milk production history for the
farm, as determined under subsection (d); and
(2) the demand adjustment factor for the farm,
as determined under subsection (e).
(d) BASE PRODUCTION HISTORY.—
(1) DETERMINATION.—The base milk produc-
tion history for a farm for a calendar year shall be
(f) REPAYMENT.—If the Secretary determines that
annual milk marketings on a farm exceed the quantity
permitted for the farm under the agreement entered into
under subsection (c), the Secretary shall require the pro-
ducers on the farm to repay all payments made under this
section to the producers for that calendar year. The
amount repaid shall include interest calculated at the rate
equal, to the extent practicable, to the cost to the Com-
modity Credit Corporation of borrowings from the United
States Treasury for the relevant time period.
(g) RELATION TO OTHER PAYMENT AUTHORITY.—
Payments under this section for a calendar year do not
count toward the $50,000 per farm limitation in section
3(d)(1).
(h) TIME
FOR
PAYMENTS.—Payments required
under this section shall be made on a quarterly basis dur-
ing the calendar year.
SEC. 3. ADDITIONAL PAYMENTS TO DAIRY PRODUCERS TO
OFFSET LOW MILK PRICES.
(a) DEFINITIONS.—In this section:
(1) AVERAGE MILK PRICE.—The term ‘‘average
milk price’’ means the average price under the Fed-
eral milk marketing orders of Class III milk (or milk
used to produce cheese) and Class IV milk (or milk
used to produce butter and nonfat dry milk) for the
preceding three-month period.
(2) CLASS I MILK.—The term ‘‘Class I milk’’
means milk classified as Class I milk under a Fed-
eral milk marketing order.
(3) CLASS II MILK.—The term ‘‘Class II milk’’
means milk classified as Class II milk under a Fed-
eral milk marketing order.
(4) CLASS
III
MILK.—The term ‘‘Class III
milk’’ means milk classified as Class III milk under
a Federal milk marketing order.
(5) CLASS IV MILK.—The term ‘‘Class IV milk’’
means milk classified as Class IV milk under a Fed-
eral milk marketing order.
(6) FEDERAL MILK MARKETING ORDER.—The
term ‘‘Federal milk marketing order’’ means a milk
marketing order issued under section 8c of the Agri-
cultural Adjustment Act (7 U.S.C. 608c), reenacted
with amendments by the Agricultural Marketing
Agreement Act of 1937.
(7) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Agriculture.
(8) TARGET PRICE.—The term ‘‘target price’’
means $12.50 per hundredweight for milk con-
taining 3.50 percent butterfat.
(b) PAYMENTS
REQUIRED.—The Secretary shall
make a payment under this section to producers on a farm
for any month in which the average milk price applicable
to that month is less than the target price. Producers shall
be eligible for payments regardless of whether they market
their milk within the Federal milk marketing order sys-
tem. Payments for producers operating outside the Fed-
eral order system shall be calculated to be equivalent to
payments for producers operating within the Federal
order system.
(c) AMOUNT OF PAYMENT.—Subject to subsection
(d), the amount of the payment to be made to producers
on a farm under subsection (b) for a month shall be equal
to the following:
(1) The difference between the target price and
the average Class III milk price multiplied by the
percentage of milk used as Class III milk of the
total amount of milk marketed by the producer, as
determined by the Secretary.
(2) The difference between the target price and
the average Class IV milk price multiplied by the
percentage of milk used as Class IV milk of the total
amount of milk marketed by the producer, as deter-
mined by the Secretary.
(3) The difference between the target price and
the average Class I milk price multiplied by the per-
centage of milk used as Class I milk of the total
amount of milk marketed by the producer, as deter-
mined by the Secretary.
(4) The difference between the target price and
the average Class II milk price multiplied by the
percentage of milk used as Class II milk of the total
amount of milk marketed by the producer, as deter-
mined by the Secretary.
(d) LIMITATIONS.—
(1) PAYMENT
LIMITATION.—Maximum pay-
ments under this section for a calendar year may
not exceed $50,000 per farm.
(2) QUANTITY LIMITATION.—The producers on
a farm shall be eligible for payments under this sec-
tion for a month for not more than the smaller of
the following:
(A) The producers’ average monthly pro-
duction, determined using the production dur-
ing the previous calendar year and the current
calendar year.
(B) 216,666 pounds produced monthly.
(C) Some other production base for the
farm considered appropriate by the Secretary.