Frankfort, KY – Getting a grasp on Congressional action concerning the Farm Bill has been a difficult task through the holiday period.
The fiscal cliff dilemma, which overshadowed agriculture and everything else, went into the final hours of 2012 leaving many in and out of the ag industry on pins and needles.
In the early hours of the New Year, the Senate passed “fiscal cliff-avoiding” legislation brokered by Senate Minority Leader Mitch McConnell and Vice President Joe Biden that included a Farm Bill extension. Later that day the House finally voted to pass the same legislation. It was the House that stopped the Farm Bill earlier in the year after Senate and House Ag Committee versions were passed.
That extension was what most in the industry expected since the Lame Duck session began. But what really brought the issue to light was the “dairy cliff” quandary that promised steep increases in dairy products had the Farm Bill been allowed to lapse into Permanent law, created in 1949.
That law, still on the books, would have obligated the government to pay parity pricing to make sure dairy farmers were adequately compensated for their work. But those numbers were based on comparisons to other commodities from the early 20th Century. Under those rules the wholesale price of milk to farmers would have doubled.
That prospect inspired a flurry of reports and releases not only from media sources from government officials that milk prices would be increasing to $7 or $8 per gallon levels.
Senate Committee on Agriculture, Nutrition and Forestry Chairwoman Debbie Stabenow released a statement just before Christmas that said, “Fiscal cliff tax increases would hit middle class families' pocketbooks, but so would paying six or seven dollars for a gallon of milk. It is absolutely critical that Congress pass a new five-year Farm Bill to keep food prices stable and protect America's 16 million agriculture jobs.”
Agriculture Secretary Tom Vilsack released his own statement after the passage of the extension. It read in part, “While I am relieved that the agreement reached prevents a spike in the price of dairy and other commodities, I am disappointed Congress has been unable to pass a multi-year reauthorization of the Food, Farm and Jobs bill to give rural America the long-term certainty they need and deserve.”
Maury Cox, the Kentucky Dairy Development Council’s executive director said the talk of skyrocketing milk prices was nothing more than a scare tactic being used by those who wanted the legislation pushed through at the last minute. He said anything’s possible but most likely nothing would have happened.
Cox also said before the vote, an extension was the likeliest scenario but even without the legislation, the Secretary of Agriculture has the authority to deal with parity pricing.
“The secretary has the authority to affect that and set prices. I don’t see where prices are going to change whatsoever. In fact milk prices to the farm may very well have come down,” he said.
Cox added that there was a lot of fear mongering going on before the vote and milk was being used as a scapegoat for that. He said it was fair to say that no one was doing the dairy farmer any favors by running around saying milk would have double in price if legislation had not passed, adding it had the potential of hurting sales even further and it wasn’t good for the dairy industry to be used in that way.
The idea of higher milk prices caught the attention of lawmakers and the general public however, prompting a Farm Bill extension until Sept. 2013 that was added to the American Taxpayer Relief Act of 2012.
The extension seemed to be more of a last ditch compromise than a legitimate piece of legislation, leaving many in agriculture upset with the outcome.
A year ago when discussions for a new Farm Bill were just getting started the key word was reform, meaning spending cuts. Those were to include eliminating unnecessary subsidies, consolidating programs to end duplication, and cracking down on food assistance abuse, according to information from the Senate Ag Committee.
Spending cuts were included to the tune of $23 billion in the Senate bill and $35 billion in the House Ag Committee bill. The current extension does not address those issues.
American Farm Bureau President Bob Stallman said an extension of the 2008 Farm Bill is little more than a stop-gap measure.
“We are glad that a measure is in place for most of this year, but we are disappointed that Congress was unable or unwilling to roll a comprehensive five-year farm bill proposal into the fiscal cliff package,” he said. “Now, it will be up to the new 113th Congress to put a new farm bill in place, and we will continue to insist on the kind of reforms that were included in the proposals approved by the Senate and the House Agriculture Committee during the 112th Congress.”
The National Sustainable Agriculture Coalition was a little less kind in its summary of the extension. A statement from the organization referred to the legislation as “awful” and a “disaster”.
The statement read, “We are extremely disappointed in the Republican Leadership for proposing this deal and in the White House for accepting it. The message is unmistakable – direct commodity subsidies, despite high market prices, are sacrosanct, while the rest of agriculture and the rest of rural America can simply drop dead.”
The question now is when will work on the new bill begin? Some want it to start next month. The House Ag Committee’s ranking member, Collin Peterson, a Democrat from Minnesota wrote letters to both House Speaker John Boehner and Majority Leader Eric Cantor voicing his disgust over the way House Leadership had handled the Farm Bill in 2012.
He said he saw no reason why the House Ag Committee should undertake the “fool’s errand” of crafting another Farm Bill unless he has assurances from House leadership that the committee’s work will be considered.
Boehner refused to let a previously passed committee version of the bill come to the floor saying there were not enough votes to pass it.
Peterson wrote to Boehner, “Given the behavior of the Republican Leadership and their treatment of the House Agriculture Committee in the previous Congress, I believe it is only fair for me to ask for a written commitment that your Leadership team will find floor time during this Congress if the Committee marks-up a new five-year farm bill. I would also expect it should not take more than a month for your team to determine the appropriate time for floor consideration and to announce that date publicly.”