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Avoiding the dairy cliff?

DANIEL LOOKER Updated: 01/02/2013 @ 2:33pm Business Editor

So much for reform.

With no new farm bill to include in any last-minute "fiscal cliff" agreement, House and Senate agriculture committee leaders over the weekend agreed to extend the 2008 Farm Bill through next September, essentially dropping for now any effort to make substantial reforms and contribute to trimming the deficit. Both the Senate and the House will need to vote on the extension.

The House was in session Monday morning. By afternoon, as a possible "fiscal cliff" compromise took shape, ag committee leaders were hopeful that the farm bill extension would come up for a vote before day's end.

"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," House Agriculture Committee Chairman Frank Lucas (R-OK) said in a statement. "This provides certainty to our producers and critical disaster assistance to those affected by record drought conditions."

"The one-year extension legislation posted is the result of discussions with Ranking Member Peterson and my colleagues in the Senate," Lucas said. "It is not perfect – no compromise ever is -- but it is my sincere hope that it will pass the House and Senate and be signed by the President by January 1."

An extension means that direct payments will continue for another year. They will be paid on 82.5% of base acres, instead of the current 85%.

Savings from the slightly smaller direct payments will be used to pay for disaster programs and some of 37 programs that expired with the end of the 2008 law.

Senate Agriculture Committee chairwoman Debbie Stabenow (D-MI) had been pushing for a new farm bill to the last minute. If Congress did not act, permanent farm legislation dating to 1949 and 1938 would have begun to take effect in 2013, starting with an antiquated system of dairy price supports that threatened to double milk prices for consumers.

“While the Senate passed a bipartisan five-year farm bill in June that cut subsidies and reduced the deficit, the lack of action by the House Republican leadership has put us in a situation where we risk serious damage to our economy unless we pass a temporary extension," Stabenow said in a statement released Sunday.

“If a new farm bill is not passed in the next few days, Agriculture Committee leaders in both chambers and both parties have developed a responsible short-term Farm Bill extension that not only stops milk prices from spiking, but also prevents eventual damage to our entire agriculture economy," Stabenow said.  "It is critical that we pass a five-year farm bill that gives farmers and ranchers the certainty they need to plan for the future. If a new farm bill doesn’t pass this Congress, we’ll soon hold another mark-up and just keep working until one is enacted next year.”

The National Sustainable Agriculture Coalition said in a statement later on Sunday that it was pleased to learn of the extension of some programs that would have expired without small changes to the 2008 farm law.

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