Dick Lugar: “Senator Domenici proposes a different formula for dairy payments. I will discuss the issue for a few minutes before…”

“Senator Domenici proposes a different formula for dairy payments. I will discuss the issue for a few minutes before laying the amendment aside for further debate. Some in the Senate have decided to provide $2 billion in payments to dairy farmers over the next 5 years. However, there is considerable disparity in the way these payments will be distributed under the Daschle substitute. The Daschle substitute establishes different payment rates, different target prices, and different payments for a handful of States. The Daschle substitute would provide 25 percent of the producer payments to producers in States that account for only 18 percent of our Nation's milk. There is no sound policy reason for this disparity. Senator Domenici has asked that we look specifically at New Mexico. Under the current proposal, New Mexico would average about 6 cents per hundredweight on milk, while producers in Maine would average almost 90 cents. A 1,000-cow herd in New Mexico would receive from zero, in a low market scenario, to $22,000. If this same farm were located in New York, for example, these numbers could be far higher. Dairy farmers work in a national market.”