Minn. congressman proposes dairy subsidy reforms
MILWAUKEE (AP) — When milk prices plummeted in 2009, wiping out years of savings and causing hundreds of dairy farms to go under, struggling farmers pleaded for the government to do something to help stabilize prices and inspire growth. They may soon get their wish.
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Many dairy producers are grateful for the proposal, saying it would help eliminate the roller-coaster price swings that have done so much damage. Others, however, say the real answer is less government interference, not more.
The crisis started when milk prices, driven up by overseas demand, plummeted from a high of $18 per hundred pounds in 2008 to about $12 amid the recession in 2009. Farmers began slaughtering their cows to try to cut production. At one point, an average of 50,000 cows a week were being killed in an effort to reduce the milk glut.
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His plan has three main components. First, it would eliminate a pair of rarely used federal programs designed to help dairy farmers in lean times. Second, it would strengthen an insurance-like program in which the government pays farmers when milk profits become too slim. Third, when profit margins shrink to a certain level, the government would limit how much milk is produced.
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