NFU's Market-Driven Inventory System (MDIS): The only proposal for the 2012 Farm Bill that addresses market collapse.

In the current economic climate amid a growing budget deficit, federal spending on agriculture programs will likely be cut and the next farm bill will likely face significant funding reductions. The goal of the next farm bill, therefore, should be to provide an effective safety net for family farmers, improve the efficiency of existing programs and reduce overall costs. This study, conducted by the University of Tennessee’s Agricultural Policy Analysis Center and commissioned by National Farmers Union, presents an alternative policy approach that will reduce overall farm payments. The policy approach includes a combination of farmer-owned reserves, increased loan rates, set-asides, the elimination of direct payments, and reduced reliance on other government payment instruments. The policy will be referred to in this report as Market-Driven Inventory System (MDIS). The study examines what the effects of MDIS would have been during the period from 1998 to 2010.

Who benefits from MDIS?

Farmers: MDIS helps smooth out some of the wild price swings that can put some farmers out of business. By providing a greater level of income certainty, MDIS helps farmers plan for the future without decreasing farm income.

Livestock Producers: Less volatile commodity prices from the MDIS helps livestock producers keep input costs more stable and helps to prevent skyrocketing grain prices, which can bankrupt livestock producers.

Ethanol Industry: Rising commodity prices are damaging to the ethanol industry and can cause disruptions in the supply chain. MDIS decreases price fluctuation faced by ethanol plants and ensures more stable production, which in turn puts America on the road to energy independence.

The Impoverished: Particularly in developing nations, a small increase in commodity prices can mean the difference between putting food on the table and going hungry. MDIS reduces the price swings that cause many people to go hungry when they can no longer afford food.

Taxpayers: A study conducted by the University of Tennessee and funded by National Farmers Union found that, had MDIS been in place from 1998-2010 rather than the existing programs, taxpayers would have saved more than $95 billion compared to what the federal government actually spent on farm programs. This is nearly a 60 percent reduction in expenditures.

Click here to read more about MDIS

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Founded as the the Farmers Educational Cooperative Union of America in Point, Texas, to help the family farmer address profitability issues and monopolistic practices, National Farmers Union has been working to protect and enhance the economic well-being and quality of life for family farmers, ranchers and rural communities through advocating grassroots-driven policy positions adopted by its membership.

NFU represents farmers and ranchers in all states, with organized divisions in 33 states. The key to the success and credibility of the organization has been Farmers Union’s grassroots structure in which policy positions are initiated locally. The policy process includes the presentation of resolutions by individuals, followed by possible adoption of the resolutions at the local, state and national levels. Members and staff of the Farmers Union advocate these policy positions nationwide.

National Farmers Union believes that good opportunities in production agriculture are the foundation of strong farm and ranch families, and strong farm and ranch families are the basis for thriving rural communities.