Detailed Summary of the Dairy Provisions of the Food Security Act of 1985
Novakovic, Andrew M.
The House of Representatives passed the so-called Dairy Unity Act on September 26, 1985the final vote on its entire farm bill took place on October 8. On November 23 the Senate approved its version of a ·farm bill, including a dairy title. On December 18 Congress finally ironed out a compromise omnibus farm bill. The President signed the Food Security Act of 1985 on December 21, bringing to an end the long and overdue process of putting together legislation that is intended to define policy and shape agriculture for the next five years. The Food Security Act of 1985 (FSA) is somewhat similar in its general outline and intent to the bill it succeeded, the Dairy Production Stabilization Act of 1983 (DPSA). It contains authority for future cuts in the support price, it levies an assessment on dairy farmers, and it authorizes a voluntary program which provides special incentives to farmers to reduce milk production. Several striking differences also exist. First, the strategy of setting specific prices in the DPSA clearly was a temporary measure, bridging the gap between one omnibus farm bill (1981) and the next (1985). Although specific prices are set by legislation through 1987, the pricing procedures in the new bill will run the five year life of the bill (calendar years 1986 through 1990) and are intended as longer run measures that will respond to future needs. Second, the supply management program contained in this bill is also designed and intended to have longer lasting effects than the Milk Diversion Program (MDP). Unlike the 5 to 30 percent reductions called for under the MDP, producers will now be asked to consider whether they wish to cease producing milk altogether. Third, the FSA contains other measures intended to address federal orders and other, broader dairy issues than did the DPSA, which was more narrowly focused on price support policy. Finally, the dairy policies discussed below are part of a package of policies and programs affecting all of agriculture. Other parts of the FSA will have important impacts on the dairy sector.
A.E. Ext. 86-01
Charles H. Dyson School of Applied Economics and Management, Cornell University