Dairy Provisions of the Enacted 1996 Farm Bill (CRS Report for Congress)
| Release Date |
May 17, 1996 |
| Report Number |
96-440 |
| Report Type |
Report |
| Authors |
Ralph M. Chite, Environment and Natural Resources Policy Division |
| Source Agency |
Congressional Research Service |
Summary:
The Federal Agriculture Improvement and Reform Act of 1996 ( P.L. 104-127 , the enacted 1996
farm
bill) contains provisions (Title I, Subtitle D, Chapter 1) that significantly modify the two major federal
policy tools used to support milk markets: the dairy price support program and federal milk marketing
orders. The new law reduces the level of price support under the dairy price support program in each
year (1997 through 1999), until the program is terminated at the end of 1999. In return, the deficit
reduction assessment paid by milk producers is eliminated almost immediately. The dairy price
support program is replaced on January 1, 2000 by a recourse loan program for dairy processors to
assist them in managing their inventories. The enacted 1996 farm bill requires a reduction in the
number of milk marketing orders, to at least 10 but no more than 14 -- and gives USDA three years
to administratively achieve this goal.
Other dairy provisions in the 1996 law: 1) give the New England states temporary authority to
enter into a regional dairy compact, pending a USDA determination that there is a compelling public
interest in a compact; 2) allow California to retain its minimum nonfat solids standards for fluid milk
at its current level; 3) establish a maximum manufacturing allowance for states; 4) extend the
authority for the processor-funded promotion program through 2002; and 5) fully fund the dairy
export incentive program at the maximum level allowed under the Uruguay Round agreement.
