Farm Bureau Policy Development Fact Sheet No. 8 — 2012 DAIRY PROBLEMS AND ISSUES FEDERAL MILK ORDER REFORM There is little doubt that the current Federal Milk Marketing system is inadequate and needs to be reformed. Producers continue to struggle even with better than average milk prices. Dairy is seen by most governments as an essential part of a country's economy. There are a number of good reasons for the special status that dairy farming has gained in the minds of governments. Within our culture milk is considered to be an essential part of a healthy diet, and obviously with good reason given the size and health of our young generation. Over the past twenty years, the export market has remained a dumping ground for excess production. Less than three percent of all world production is actually traded, but the United States’ percentage is currently much greater than that. Many ideas and plans have been developed to help producers such as the SpecterCasey Bill, the Holstein USA Plan and the National Milk proposal and all state their plan is the best plan for producers. In truth, they all have good plans, but do not address all producers’ needs. To this point, the plan writers should collaborate together in order to create a plan that will work for every producer in the United States rather than to certain regions of the country or a certain size an operation. Related Policy: Dairy 119, National Dairy Program N-238 1. 2. 3.

With the current dairy situation, what is needed to maintain milk production in the state and region? What do you need from a Federal Milk Market system to maintain your operation or even allow you the ability to grow and expand production? Which plan suits your operation the best or has that plan not net been developed?

ARKANSAS MILK STABILIZATION BOARD The State of Arkansas passed the legislation that was presented to them in the 2009 session. However, the governor did not sign the collection mechanism bill and sent it back to the sponsor. The Dairy Stabilization program was funded for two years. The work put into passing this legislation has been enormous — but we have not reached our goal. Fortunately the program had some money left over and the Dairy Stabilization Board has worked extremely hard to keep that money for a third year in the program. The governor has made it very clear that no new taxes or surcharges will be added to any food item at this time. We must devise a plan to help pass the collection portion of the legislation. One of the goals set forth by the Dairy Stabilization Board was to

‘grow’ the dairy production within the state. However, without a permanent funding mechanism or some assurance of dollars in place to show that the state of Arkansas is serious about helping producers, it will be more difficult to attract out of state producers or have current producers grow production under what may be a temporary program. We must get funding passed in order to convince producers to expand and entice out of state producers to move to Arkansas. Related Policy: Dairy 119 1. 2.

What is the current break-even point to keep you in the dairy business? What measures are needed to help pass the funding mechanism to ensure that dairy production will not only stabilize but grow in the state of Arkansas?

IMMIGRATION An economic analysis concluded that $5 to $9 billion in annual production is in jeopardy if the employee shortage continues. Jobs in agriculture are physically demanding, conducted in all seasons and often are transitory. For many prospective workers from other countries, these jobs present real economic opportunities. Employment of those who are in the United States illegally is a violation of federal law and consequences for employers can be severe. While employing illegal non-residents is a violation of law, determining the legal status of prospective employees often puts employers in a quandary. An employer is limited in asking the prospective employee to determine if they are authorized to work. If the employer requests more or different identification documents than allowed by law, or more than the original documents provided by a prospective employee, then the employer can be subject to a Department of Justice investigation or a citizen suit for unlawful discrimination. When domestic workers are unavailable to fill jobs on farms and ranches, agricultural employers may recruit and hire temporary foreign workers under the H-2A program. However, the H-2A program is bureaucratic and expensive. It does not cover all parts of agriculture and does little to encourage grower participation. The H-2A program also requires employers to provide free housing and transportation from a worker’s home country, and to pay a base wage rate that is historically well above market levels. The program properly requires that employers first recruit domestic workers before foreign guest workers but it unreasonably favors domestic workers even after the H-2A workers arrive and begin work at an agricultural workplace. Farm Bureau opposes amnesty; but supports an adjustment of status for a select number of those who can document their work in agriculture, who will continue to work in agriculture for a specified period of time after obtaining legal status; and who have otherwise demonstrated that they are eligible for admission to the United States. Farm Bureau strongly supports permanent reforms to the H-2A agricultural guest worker program that:  Allows employers to pay workers a prevailing, market-based wage;

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Accommodates the needs of modern agriculture, including year-round livestock operations, whose labor needs have changed since the inception of the program; and Eliminates unnecessary bureaucracy so it is more responsive and timely to employers’ and workers’ needs while diminishing its propensity to be a magnet for costly and unnecessary litigation.

Related Policy: Crime and Law Enforcement 162, Right-to-Work and Labor 167, Immigration N-137 1. 2. 3.

How do we resolve the status of millions of illegal aliens who are in the country now? What kind of enforcement will be required to discourage future illegal entry? What kind of guest worker programs will be required to assure an adequate workforce in the future?

BRUCELLOSIS – FUNDING ANIMAL HEALTH PROGRAMS The overall profile of Arkansas’ efforts toward controlling and/or eliminating animal diseases may be ripe for revision --- or, at least, subject to reasoned scrutiny. Arkansas Livestock and Poultry Commission is the agency charged with implementing the state’s animal health programs and regulations. Various issues that face Arkansas’ cattle industry and the L&PC are presented below. The Brucellosis Program: Arkansas achieved Class Free status in 1997. The program currently consists of market surveillance (testing adult cows at markets) and requiring calfhood vaccination on all eligible heifers sold at markets and returning to Arkansas farms. Both L&PC personnel and private veterinarians provide vaccination services. As of now, Arkansas is the only state that is requiring cows to be tested at markets. We, too, are the only state that has a requirement on calfhood vaccination. Our current program is primarily supported by the $1 per-head fee on all cattle sold. Both state and federal funds, that were once available for this program, have been severely lowered or eliminated. Also, the $1 fee is generating less revenue due to a somewhat smaller cattle inventory in the state and a higher number of Arkansas cattle being sold directly in other states; therefore, avoiding the fee. Related Policy: Beef Cattle 115, Swine 121, Animal Health Emergency Preparedness N-303 1. 2. 3.

Should Arkansas consider changes to its brucellosis program? What level of testing is needed for cows in commerce? At what level should calfhood vaccination be available to producers?

Future Structure and Funding for Arkansas’ Animal Health Programs: Given the discussion points above (and any others that may arise), a basic consideration is adequate funding for the L&PC to implement its animal health mission. With the current level of funding support, a reduction in programs and services may be required in the near

future. Reduced expenditures on the brucellosis program may be in order from a disease control standpoint and would allow the agency to cope with its existing budget; however, it would require fewer personnel available to monitor cattle moving through markets. These same personnel may be needed to implement the Animal Disease Traceability Program when it becomes effective and to continue calfhood vaccination and other livestock industry services. 1.

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Is it important that the L&PC maintain a field force to engage in providing animal health services and monitoring the health status of cattle moving through markets? Should the state’s animal health programs be provided by the L&PC and funded with an “animal health” fee? … Or should these programs shift toward a separate fee structure for each service provided by markets and their veterinarians? How should the situation be handled whereby cattle producers receive on-farm vaccination and other services; yet, by selling their animals out-of-state, do not contribute to funding the agency?

Related Policy: Dairy 119, Dairy Research 120 OTHER ISSUES  Dairy Sustainability: How can Arkansas producers become more sustainable during times of high input costs?  Dairy Research: What efforts are needed to elevate programs or structured activities to better assist dairy producers?

[If you need additional information on these and other issues concerning the dairy industry or if you desire assistance with your county policy development meeting, contact Bruce Tencleve, Dairy Division Coordinator at 501-228-1856 or via e-mail at bruce.tencleve@arfb.com.]