2012 Farm Bill Update (as of Jan 2, 2013)

Working into the wee hours of the new year, the U.S. Senate overwhelmingly passed a fiscal cliff bill that will extend farm policy through September. With this extension, legislation has essentially kicked the farm bill can down the road in an attempt to avoid the so-called Milk or "dairy" cliff.

The giant New Year’s tax package rushed through Congress Tuesday includes a nine-month farm bill extension that forestalls any immediate spike in milk prices but also represents a bitter blow for farmers who had hoped for long-sought changes in the dairy support program.

Continuation of the 2008 farm law means dairy price supports will not revert to 1949 law, and support prices won’t rise to $39. In addition, continuation of the 2008 farm law means the Milk Income Loss Contract payment program would continue through September 30, 2013, but at what level is uncertain.

From Jerry Kozak, President and CEO of National Milk Producers Federation:

“The Senate’s vote [December 31] on a nine-month extension of current farm policy is a devastating blow to the nation's dairy farmers. After months of inaction, the plan that passed overnight as part of the fiscal cliff package amounts to shoving farmers over the dairy cliff without providing any safety net below.

Meanwhile, the House is now considering a similar proposal that extends the farm bill nine months, but also without the new dairy safety net program that would provide better protection for the nation's milk producers. Despite the progress made in 2012 on the farm bill, we’re starting 2013 on a bad note. We oppose any farm bill extension of any duration that does not contain the Dairy Security Act, and resolve to work this year on achieving that as a long-term goal.”

Congressman Tim Walz also wasn't completely satisfied with the passage of an extension as opposed to a full five-year farm bill.

“While there are many good provisions within this bill, it is far from perfect. I’m deeply disappointed with the Farm Bill extension, which doesn’t include funding for the Beginning Farmer and Rancher Program. Rural America needs certainty. We passed a five-year Farm Bill out of committee in July and there is simply no good reason why House leadership continues to block it from being brought forward for a vote," said Walz in a press release.

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The top leaders in both parties on the House and Senate Agriculture committees have agreed to a one-year extension of the 2008 farm bill that expired in October, a move that could head off a possible doubling of milk prices next month. With President Barack Obama showing new interest, House and Senate Agriculture committees are drafting a short-term farm bill extension to avert a spike in milk prices next month but also permit another round of direct cash payments to already profitable growers — a costly subsidy that lawmakers had vowed to end this year.

Absent some action, an outdated 1949 farm law kicks back in on Tuesday, Jan. 1, requiring the Agriculture Department to begin buying up dairy products at a rate of $38.54 per hundredweight, or more than double the prevailing price today.

“No one truly knows the full impact at the grocery story, but the threat of $6 per gallon of milk brought President Barack Obama off the sidelines Friday and accelerated efforts to find a fix to be voted on as early as Monday," David Rogers reports.

One bill would extend the expired 2008 farm bill, which expired Sept. 30, for one year. The second would provide for a farm-bill extension through January and a third would just extend dairy programs through January.

The Hill update added that, “‘Clearly, it is no longer possible to enact a five-year farm bill in this Congress. Given this reality, the responsible thing to do – and the course of action I have long encouraged if a five-year bill was not possible – is to extend the 2008 legislation for one year. This provides certainty to our producers and critical disaster assistance to those affected by record drought conditions," said House Agriculture Committee Chairman Frank Lucas (R-Okla.) in a Sunday statement.

Minnesota Rep. Collin Peterson, the ranking Democrat on the House Agriculture panel and a prominent leader on dairy issues, said he was called by Minority Leader Nancy Pelosi Friday after Obama reached out to her seeking action. Talks had already been underway on the extension, but the president’s intervention led to a flurry of exchanges among the committee leaders Friday.

Senate Agriculture Chairwoman Debbie Stabenow (D-Mich.) told POLITICO the goal is to have a “responsible short-term extension” of no more than nine months. And her hope still is to enact a five-year plan early enough in 2013 that the cash subsidies could be reduced or eliminated before payment is due in October.

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