Draft legislation aimed at supporting struggling U.S. dairy farmers was released on Wednesday. The draft language is based on reform proposals put forward by the dairy industry, which welcomed the draft’s release.

“This is a long-anticipated and very welcome next step in the process of upgrading dairy policy to better provide farmers with protection, stability, and the opportunity for growth,” said Jerry Kozak, President and CEO of the National Milk Producers Federation(NMPF).

For more, see draft and fact sheet.

Minnesota Rep. Collin Peterson, ranking member of the House Agriculture Committee, said he released the draft now “because we need to act before the next farm bill. If we have another dairy crisis like we had in 2009, we could lose half our dairies. The discussion draft allows us to keep the ball moving while continuing to have a dialogue with the dairy industry.

“Current dairy programs aren’t working; they’re not keeping up with the challenges facing today’s dairy industry. This proposal addresses these challenges. The proposal creates a strong safety net that will provide the support all sectors of the diverse industry need during tough times.

“I’ve never seen the industry as united as it is now and I appreciate their efforts to work together and find a solution that will ensure Americans continue to have access to a safe and abundant supply of fresh milk.”

Peterson’s proposal consists of three main components – a margin protection program, a Dairy Market Stabilization Program and reforms to the Federal Milk Marketing Order system. These proposals would provide a safety net based on margin protection, rather than price; and replace both the Dairy Product Price Support Program (DPPSP) and the Milk Income Loss Contract (MILC) Program.

The Congressional Budget Office (CBO) has reviewed the discussion draft and determined it shows savings.

According to the NMPF the legislative language is termed a “discussion draft,” rather than a bill, as it provides members of Congress with the opportunity to allow fellow congressmen, key stakeholders, and constituents the opportunity to view the language prior to the official introduction of a bill. It also allows backers of the draft to seek cosponsors who wish to affix their names to the bill, prior to it being formally introduced.

Kozak noted that the economic impact of the reforms will save the government money, compared to current dairy program spending. Such a development “becomes a critical part of the effort to help us move it forward, because all of the talk in Washington lately has been about cutting spending, and specifically, which farm program expenditures can be reduced. We now have a good answer to that question where dairy programs are concerned.”

The NMPF will spend the coming weeks building support for the legislative draft, in anticipation of the subsequent formal introduction of a bill in the House, “with an emphasis on obtaining bipartisan support from across the country for this critically-important improvement in dairy policy,” said Kozak. “We also hope the Senate will take up the charge, so that we can get the legislation passed and implemented as soon as possible.”

For an update to this report, see Dairy draft legislation criticized, proponents push back.