No Farm Bill Christmas Present

DC Dialogue

Legislators return with only a few days left before heading over the fiscal cliff and milk cliff with no plans to pass farm bill.

Published on: December 26, 2012

The clock is ticking and legislators are going into the final hour of this lame duck session with no gift for rural America this Christmas. The Senate returns Dec. 27 and the House is expected back this weekend, but no one is holding their breath for a last minute farm bill deal.

The possibilities for a long-term bill were all but snuffed out last week, when word came from House Speaker John Boehner, R-Ohio, that he did not believe he could achieve the necessary votes for a fiscal cliff deal if anything else is attached to the measure.

Separate negotiations on the fiscal cliff, the combination of tax increases and spending cuts set to hit in January, also appear to have stalled, with Boehner proceeding on his “Plan B” which he eventually did not bring to the floor Thursday after realizing he wouldn't have sufficient votes.

It is almost certain both chambers will return after Christmas to complete the Congressional session. Whether or how farm policy certainty will be addressed then is still unknown.

Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., rejected the notion that there is no legislative vehicle for a farm bill to move before the end of the year. She also threw support behind an agricultural disaster assistance amendment to a bill that would provide aid to victims of Superstorm Sandy. That is one of the few bills anticipated to move in either chamber before they recess. 

The National Farmers Union (NFU) passed a resolution opposing an extension of the 2008 Farm Bill. NFU president Roger Johnson reminded that any "short-term extension of the farm bill would only cause a litany of problems that will not be easily fixed when a new farm bill eventually is signed into law." Many farm groups are concerned that the new baseline developed by the Congressional Budget Office next year will result in even larger and disproportionate cuts to agriculture spending.

Milk cliff

One of the most talked about repercussions of not passing a farm bill is reverting to 1949 law. For dairy it would force the government to buy milk at roughly twice the current market price to maintain a stable milk market.

"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," Stabenow said in a statement Dec. 21.

In a conference call with reporters on Thursday, Ag Secretary Tom Vilsack said the department was exploring all its options to deal with the possibility of the 1949 law going into effect.

“We will do whatever we are legally obligated to do in a timely way,” said Vilsack, who declined to be specific on the amount of time. He said the agency is looking back at the process that has been pursued in similar situations in the past as to how to handle the process that kicks in Jan. 1.   

The agriculture secretary could drag his heels on the milk purchases until Congress passes a new farm bill or an extension of the 2008 one that expired in September.

However, if the process does move forward, Vilsack said it could not only create higher milk prices at the grocery store, but also put food processors in a position of having to find substitutes and putting a strain on the nation's nutritional programs.