bake - March 2014 - 14

legislation

The New Farm Bill
President Obama signed the $956 billion farm bill on Feb. 7 at

Protection Program to replace the Milk Income Loss Contract

Michigan State University, where he said the legislation "lifts up

(MILC) program as the centerpiece of the federal dairy policy.

our rural communities" and would give more Americans "a shot

Margin protection would provide producers with indemnity

at opportunity" in years ahead. The Agricultural Act of 2014 and

payments when margins are below the margin coverage levels

its farm, conservation and nutrition programs will supplant those

the producer insures annually. The dairy margin is deﬁned as

of the expired Food, Conservation and Energy Act of 2008.

the all-milk price per cwt minus the average feed cost as calculated monthly by the US Department of Agriculture.

The new farm law was expected to reduce spending on farm
and nutrition programs by $23 billion over 10 years. The

The aim is to protect farm equity by guarding against destruc-

most signiﬁcant farm policy reform was the ending of direct

tively low margins, not to guarantee a proﬁt for individual

payments to producers that have been made for each of the

producers, proponents asserted. The bill requires the new

past 18 years. The payments were established to help wean

margin protection program to be in place no later than Sept. 1,

producers from then existing federal income support programs

2014, at which time the MILC program would end.

that were to be phased out. But the support programs, while
modiﬁed, weren't phased out, and the direct payments were

Sugar program remains the same

enshrined in subsequent farm bills, even as they increasingly

The nation's sugar program remained unchanged to the

were viewed as indefensible, even by producers themselves.

delight of growers but to the disappointment of the food
industry. "While reform was a key ingredient to this new farm

Under the Agricultural Act, enhanced federally subsidized crop

bill, the American Bakers Association (ABA) is disappointed

insurance will become the principal safety net for producers.

that the sugar program once again remains intact," says

But of particular interest to the food industry is what is new, or

Robb MacKie, president and CEO of the ABA. "The current

not new, in key food and nutrition programs, including dairy,

program continues to put bakers, consumers and food manu-

sugar, meat and nutrition assistance.

facturers at a disadvantage, and sends jobs overseas.

The Agricultural Act of 2014 introduced compromise reforms

"The current US sugar program represents the most supply-

to the nation's dairy program that, while not earlier champi-

control focused program in agriculture policy. It even goes

oned by either dairy farmers or dairy processors, seemed at

so far as to prevent the USDA from reacting to market

least workable for both. The act establishes a Dairy Margin

demands for six months out of every year. This has created
multiple supply concerns in the past and will
lead to more in the future. This being said,
congressional supporters of sugar reform
gained momentum this past year, and ABA
will continue to propel efforts for reform as we
move forward."
Sugar growers had a different view. A
spokesman for the American Sugar Alliance
said, "Falling sugar prices and foreign subsidies
have created a challenging environment for US
sugar producers and the 142,000 US jobs they
help support. But the sugar policy contained
in the 2014 farm bill gives them the hope of
weathering the storm."

14 < MAR 2014 | bakemag.com

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bake - March 2014

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