Farm Bill Stalemate: No Crying Over Doubled Milk Prices Next Year

Without a new farm bill, old legislation would gradually take effect in 2013, beginning with dairy programs in January. Photograph by Paul Sisul

The top Democrat on the House Agriculture Committee says the $1-trillion agriculture bill the panel approved in July is out of his hands — and if milk prices double next year because Congress doesn’t act, it has only itself to blame.

“The irony of their screwing around here is that they could cost taxpayers an incredible amount of money,” should House leaders not bring a five-year farm bill to the floor during the current lame-duck session, Rep. Collin Peterson said. The Minnesota Democrat was interviewed today on “AgriTalk,” a syndicated radio program.

Without a new farm bill — the old one expired Sept. 30 — agriculture programs revert to a 1949 law, which requires massive government price-setting that would dramatically increase the prices of wheat, cotton and other agricultural products. Milk, for example, would be required to sell at $39.53 per hundred pounds, based on current market prices, almost double the level on the Chicago Mercantile Exchange.

Peterson said the bill is out of the Agriculture Committee’s control, and that he hasn’t spoken with the panel chairman, Republican Frank Lucas of Oklahoma, since September.

He said the farm bill probably will proceed as part of the talks on how to resolve the so-called fiscal cliff, the $607 billion of tax increases and spending cuts that will take effect next year without congressional action.

The eventual legislation “is going to be a top-down deal,” Peterson said. “They’re going to work it out between the president and the leaders, and they’re going to send it down to us.”

The Senate in June passed a five-year bill, which sets farm policy and funds U.S. Department of Agriculture programs including food stamps and crop subsidies. While the House Agriculture Committee approved its version of the law in July, it was never considered by the full House. Both plans would cost roughly $100 billion annually, or a trillion dollars if scored over a decade. House Majority Leader Eric Cantor last month promised to bring the stalled legislation to the House floor during the lame-duck congressional session that began this week.

Without a new bill or an extension of the ex1949-designed programs would gradually take effect in 2013, beginning with dairy programs in January and affecting other crops as their growing seasons get under way, unless the USDA comes up with alternative ways to administer programs.

Farmers would prefer the certainty of a five-year farm bill to any extension that may be proposed as a stop-gap measure, Peterson said. Still, dairy farmers, especially in areas of the country experiencing surpluses, wouldn’t be crying over expensive milk.

“Thirty-eight dollar milk is a problem” for consumers, he said. “But for the California guys who are in trouble, if they get three, four months of $38 milk, it might save them.”

What do you think about this article? Comment below!