For many Americans, instead of celebrating the end of 2012 and ringing in 2013 with optimism and joy, they worried about what Congress would decide to do about the fiscal cliff and what the tax hikes and spending cuts would look like once the dust settles.
Yesterday, a deal was reached by the Senate to avoid these automatic tax hikes, as well as avert the “dairy cliff,” which would result in a huge increase in milk prices at the grocery store. This measure includes an extension to the 2008 farm bill. The tax agreement could face a vote by the House of Representatives early next week. If agreed upon, lawmakers now have more time to come up with a five-year replacement to the 2008 farm law.
If the measure doesn’t go through the House, the 2008 farm law expires and subsidies revert back to 1949 levels. For folks wanting to buy milk, this means the retail price would double to $7/gal.
According to Reuters, “Lawmakers have so far failed to finalize a new $500-billion, five-year farm bill to replace the 2008 legislation, which authorizes spending on food stamps and crop subsidies. They had agreed to eliminate $5 billion in annual direct payments to grain, cotton and soybean growers - subsidies deemed wasteful at a time of high prices and record farm income.
“The extension of the 2008 farm law would buy time for Congress to complete a new farm bill and still would allow for another round of direct payments. However, three dozen programs in the law have no money left, including disaster relief and biofuel development, as well as a soil conservation program and some rural economic development and agricultural research programs.
“As the year-end deadline drew closer, farm-state lawmakers had drafted a one-year fix that would have included disaster relief money for livestock producers hurt by drought. It also would have created a new dairy subsidy program to compensate farmers when feed costs are high and milk prices are low. But that was nixed by Senate Republican Leader Mitch McConnell during the final hours of fiscal cliff talks.”
If an extension doesn’t get passed, dairy prices won’t be the only thing that will trouble Americans. Renewable energy programs, conservation programs, beginning farmer and rancher programs, and disaster programs will all be gone.
Congress needs to act and soon, before we revert back to 1940s levels. However, in conversations with fellow farmers and ranchers, most can’t decide where the priorities of the farm bill lay, so how can we expect Congress to come to an agreement or even understand what they are agreeing to?
It’s time to pick up that phone and have a conversation with your elected officials. Get the scoop on the fiscal cliff and farm bill. We have sat in limbo wondering for far too long.