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Avoiding the dairy cliff?

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.

"The Congressional Budget Office just released their budget scoring of the one-year farm bill extension filed by the House majority leadership," said Coalition lobbyist Ferd Hoefner.  "It shows 2013 funding being provided for many of the programs that received mandatory funding in the 2008 Farm Bill and that received mandatory funding in the Senate-passed and House Committee-passed versions of the now defunct 2012 Farm Bills.  While we question the way the bill was drafted, we are delighted it provides 2013 funding for beginning farmers, rural development, minority farmer outreach, specialty crop and organic research, direct farmer-to-consumer markets, and a variety of other programs.  We are still awaiting word as to whether the bill would also allow USDA to resume sign-ups and sign contracts with farmers for the Conservation Stewardship Program and the Conservation Reserve Program-Transition Incentive Program. In our view, those are critical pieces that need to be included in a farm bill extension measure.  We are also still awaiting word, pending House Rules Committee deliberations, as to when the measure would be brought to the House floor."

Both versions of a new farm bill would have eliminated direct payments, using part of some $50 billion in savings over 10 years to pay for a new revenue program and for a program that would supplement crop insurance payments at the county level. Even with those new programs, the Senate bill would have saved $23 billion over 10 years.

Fiscal conservatives in the House wanted greater savings, pushing for larger cuts in nutrition spending.  

On Monday, National Farmers Union president, Roger Johnson, voiced the letdown his members feel with a farm bill not completed in 2012.

“National Farmers Union, echoing the voices of most family farmers and ranchers across the country, is deeply disappointed in the dysfunction of Congress," Johnson said in a statement. "The members’ inaction leaves significant uncertainty for farmers and ranchers trying to plan for the 2013 planting season without knowing the coming year’s policies."

"The failure to pass a five-year farm bill leaves a lot of programs in peril and farmers with great uncertainty," he said. "Key programs have already expired with the last farm bill on September 30. They include renewable energy and conservation programs, livestock disaster assistance, beginning farmer and rancher programs, and much of the farm safety net, including dairy programs. We must find a way to deal with these important programs as a part of any effort to move toward a full five-year farm bill.

“If Congress must reluctantly pass an extension, they should do so by fully extending all 2008 programs, such as the disaster, energy, and beginning farmers and ranchers programs,” Johnson said.

[For a New Year's Eve update, see McConnell plunges into milk policy]

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