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Lawmaker: Dairy policy fight delays farm bill deal

By Derek Wallbank and Alan Bjerga

Bloomberg News

WASHINGTON — A longstanding dispute over dairy policy is holding up an agreement between House and Senate lawmakers on a new farm bill, House Agriculture Committee Chairman Frank Lucas said Wednesday.

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The most obvious sticking point “is the dairy policy,” Lucas said in an interview in Washington. “We’re just not quite there yet,” said Lucas, who said that once a “handful of things” are resolved, a conference meeting will be held to resolve remaining issues.

Lawmakers have been debating the bill for more than two years. The measure governs farm subsidies, which encourage the planting of soybeans, cotton and other crops that reduce the cost of materials for commodity processors including Bunge Ltd.

The bill also subsidizes crop insurers such as Ace Ltd. and funds consumer purchases at Kroger Co. and other grocers through food stamps, its biggest expense.

Under a bill passed by the Senate in June, a new program offering farmers profit-margin insurance for dairy products would require producers who voluntarily enter the program to agree to cut milk production once prices fall below a set limit.

Producers who ignore the agreement would receive less from the government. Money saved would buy dairy products for distribution to the poor — another way to reduce inventories.