CASSVILLE, N.Y. (WKTV) - President Obama signed the 956-billion dollar farm bill into law on Friday, after four years of debate in congress over farm subsidies. The bill will spread benefits to farmers around the country, benefits that one local dairy farmer said could help or hurt farms in Central New York.
The bill is signed after what the president and Chuck Worden, the owner of Wormont Dairy Farm in Cassville said was a wonderful year for product export in the United States.
" The economy is a roller coaster because we're at a point where we get good milk prices and there is a huge demand of country and world exports internationally as high as they've been," said Worden, " There is a shortage of milk in New Zealand and Europe, so the demand for milk in the international market is rising."
According to Worden the bill didn't include all he had hoped for, specifically, price stabilization. Price stabilization is what helps stabilize the price of milk, specifically when over or under production occurs.
" Price stabilization, if you signed up for the farm bill, you'd get insurance and have a quota based on how much milk you produced in the past. If it got to a point too far over what milk was needed for domestic and international markets then you'd be told you have to produce a little less milk."
Although the stabilization portion did not make the bill, margin insurance did. With margin insurance, if the price of milk went below a certain amount, the farmer would get money back to cover the margin missing.
Worden said, "It's the same principle as all insurance, particularly crop insurance. If you have a catastrophic disaster it will keep you in business."
The margin insurance comes post MILC, or Milk income loss contract program. That program compensated dairy producers when domestic milk prices fell below a specified level. With the change, instead of MILC, a government payout program, farmers will have to pay into their margin insurance policy.
" I haven't seen it all so it's hard for me to say," said Worden, "But margin insurance can be OK if dairymen buy in it'll get use. The problem with everything is we don't know what our future holds."
Overall, Worden doesn't feel dairy farmers will have much to worry about, unless another recession occurs.
"If we have another 2009 then there's trouble in the country. It means stocks crashed, no support for our economy or in the world. If that happens we have bigger issue then the price of milk."