Date: 1983-11-18
Speaker: DE LA GARZA (democrat)
Chamber: H

Mr. Speaker. I will accommodate the gentleman. I will be very happy to do so. The report contains a compromise plan to reduce surplus milk production and reduce the cost of the dairy price support program on terms almost identical to the provisions of the House bill that passed the House last week by a vote of 325 to 91. In addition. it contains provisions tightening the nonetcost tobacco program. directs the Secretary of Agriculture to make livestock feed available at reduced prices to farmers and ranchers devastated by the recent drought. and authorizes an egg industry marketing order. DA5 IRY The dairy provisions were developed earlier this year by a bipartisan coalition of Members of the House and Senate representing a crosssection of the dairy producing areas of the United States in consultation with the Department of Agriculture. The report reduces the support price for milk. creates a temporary stopgap producerfunded incentive program to encourage dairy producers to reduce milk production. and provides for a producerfunded promotion and research program to expand the consumption of milk and other dairy products. The dairy provisions replace a program which simply does not work and which Is opposed by dairy farmers throughout the country. The present program requires an assessment of $1 per hundredweight on all milk marketed for comnmercial use and calls for an increase in the pricesupport rate on October 1 of next year. Changes in the curient program are urgently needed. The conference report makes the necessary changes to adjust production to manageable levels. stimulate demand and bring stability to the industry at lower costs to the Government than any alternative proposal. I would like at this point to summarize the highlights of the dairy provisions: Price support: The support price for manufacturing grade milk would be reduced from the current level of $13.10 per 100 pounds to $12.60. Supports would be held at the $12.60 rate until April 1. 1985. At thiat time. If it appears that pricesupport purchases would be excessive. the Secretary of Agriculture could reduce the support by another 50 cents. Finally. on July 1. 1985. if it appeared that surplus purcha~ses in the following 12 months would continue to be excessive. the Secretary could make a third 50cent reduction In Supports. bringing the level down to $11.60. If. on the other hand. at that time production had dropped so far that action was needed to assure adequate consumer supplies. the Secretary could increase the support level. Paid diversion program: The legislation provides for a 15month paid diversion program. effective from January 1. 1984. until March 31. 1985. under which farmers who agree to cut production by between 5 and 30 percent would receive diversion payments of $10 for each 100 pounds by which the farmer held production below his base level. The legislation also Includes several safeguards to soften the impact of the potential extra meat supply that may result from the program on prices for beef cattle. pork. and poultry. The report authorizes the Secretary to modify diversion contracts if he determines that there has been a substantial hardship to producers of livestock or poultry sold for slaughter as a result of the culling of dairy cows under the diversion program. In making modifications. however. the Secretary cannot change the aggregate reduction in milk ni arketings required by the contract for the entire diversion period. The report assures that the Secretary has all the information he needs In order to determine the effect that the culling of dairy cows is having upon the livestock and poultry industry. Each producer entering Into a diversion contract must submit a plan describing how the producer plans to achieve his reduction in production. In addition. the Secretary Is expected to compile Information on tile number of dairy cattle slaughtered during the period of the diversion program and report this information by region to the public. There are a number of safeguards in the legislation to assure that the diversion program results in a real reduction in milk production. For example. the sale. lease. or transfer of dairy cattle by a program participant to any person Is prohibited after November 8. 1983. or up to the date of enactment of this legislation. if the Secretary should so elect. There are a few limited exceptions to this prohibition. These include authority for the Secretary to permit the sale or transfer of registered purebred breeding cattle by producers with a history of such sales. or other sales or transfers that the Secretary determines would not Impair the effectiveness of the programn. Under this authority. for exampie. the Secretary could permit export sales to other countries. These sales would have the effect of decreasing milk production and at the same time should not adversely impact on domestic beef prices. Dairy promotion program: The report directs the creation of a farmerfinanced national program of milk promotion and research. To fund the program. farmers would contribute an assessment of 15 cents for every 100 pounds of milk they market. In cases where farmers are already making contributions to local or regional promotion programs. however. they would obtain creditup to 10 cents per 100 poundsas an offset against the national assessment. For the first 6 months. however. the credit could be in excess of 10 cents up V) the full 15cent level. During the 2month period which ends on September 30. 1985. the Secretary of Agriculture would be required to conduct a referendum among dairy farmers to determine whether they want to continue the program.