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McConnell plunges into milk policy

DANIEL LOOKER 12/31/2012 @ 9:45pm Business Editor

In a last-minute addition to the fiscal cliff deal moving through the Senate, Senate Minority Leader Mitch McConnell (R-KY) is reportedly crafting his own farm bill extension that continues direct payments at the same level as the 2008 farm bill, dropping any support for smaller programs that weren't funded beyond the law's expiration last October. 

"It seems like he wants direct payments with no cuts…and no funding for disaster or for any of the orphan programs including energy.  Incredible, just incredible," one Washington lobbyist told Agriculture.com.

McConnell's efforts seem to abandon any attempt to reform farm programs or save on federal spending through the elimination of direct payments, which both the Senate and House agriculture committees have supported. And he rejects new dairy programs that were also unpopular with House Speaker John Boehner (R-OH) and some milk processors.

According to a Senate aide, "McConnell's plan would have no disaster assistance.  It would eliminate the energy title. Eliminate conservation programs.  Eliminate specialty crops and organic provisions.  And it would eliminate support for dairy farmers.  Meanwhile it continues direct payments––$5 billion in direct payments, yet McConnell can't do $50 million for dairy farmers."

"Chairwoman (Debbie) Stabenow (D-MI) and others are fighting these changes," the aide told Agriculture.com. "McConnell doesn't understand agriculture policy yet he's trying to write a new Farm Bill extension in the fiscal cliff deal, rather than take a bipartisan recommendation from leaders of the House and Senate Agriculture Committees."

McConnell's approach to dairy policy is nearly as antiquated at the 1949 permanent farm bill law but at a much lower price level, avoiding the so-called dairy cliff or milk cliff that would raise milk prices for consumers.

"The program McConnell wants to extend is the product purchase program where the government buys up products (cheese, non-fat dry milk, and butter) at roughly the equivalent of a $9.90 all milk support price.  It's basically what is in the permanent law we're all trying to avoid, just at a lower level," the aide said. "In effect, it's a non-existent support program.  The current support levels are so low that they're meaningless and have rarely triggered.  No one has relied on it as a support program for the last four years, they've relied on MILC (Milk Income Loss Contract program), but even that has been inadequate."

In the House, plans for any farm bill or farm bill extension appear more modest. On New Year's Day, the House will consider a bill "to prevent the doubling of milk prices."

According to the Washington ag lobbyist, that means that "in the House they plan to bring the simple one month delay of permanent law for dairy and absolutely nothing else." 

The lobbyist called it "a stunning abdication of any sense of responsibility."

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