Can Congress Avert a Plunge Off the 'Dairy Cliff'?
As America waits for congressional leaders to strike a deal to avoid the “fiscal cliff,” lawmakers’ further inaction — this time on the expiration of the 2008 Farm Bill — has milk producers and consumers alike approaching another cliff: the “dairy cliff.”
Unlike the Bush-era tax cuts with a looming Jan. 1 deadline, some provisions for farmers and the agriculture industry have already expired and the country's dairy farmers will be among the first impacted, which some lawmakers are concerned could cause the price of milk to increase.
“Many programs and policies of the U.S. Department of Agriculture were authorized under the Food, Conservation and Energy Act of 2008 through Sept. 30, 2012,” Agriculture Secretary Tom Vilsack said on Oct. 1. “These include a great number of critical programs impacting millions of Americans, including programs for farm commodity and price support, conservation, research, nutrition, food safety and agricultural trade. As of today, USDA's authority or funding to deliver many of these programs has expired, leaving USDA with far fewer tools to help strengthen American agriculture and grow a rural economy that supports 1 in 12 American jobs.”
The Milk Income Loss Contract (MILC) program, a program administered by the Farm Service Agency (FSA) that compensates dairy producers when domestic milk prices fall below a specified level, is one of the already expired programs.
“Of our membership, the ones who are and have been more concerned since the Farm Bill lapsed at the end of September have been the dairy folks,” said Justin Darisse, vice president of communications at the National Council of Farmer Cooperatives.
The new five-year bipartisan deal, the Federal Agriculture Reform and Risk Management Act of 2012, that would prevent subsidies and agriculture policy from reverting to price controls set in the 1940s, however, cleared both the Senate and the House Agriculture Committee back in July.
“I appreciate the efforts of my colleagues and the bipartisan nature in which this legislation was written and approved,” said chairman of the House Agriculture Committee Rep. Frank Lucas (R-Okla.) after the panel approved the legislation by a vote of 35-11 on July 11. “This is a balanced, reform-minded, fiscally responsible bill that underscores our commitment to production agriculture and rural America, achieves real savings, and improves program efficiency.”
Time is running out as the lame-duck session nears its end and Congress is steeped in fiscal cliff negotiations.
“I think we and other groups in the agriculture community here in Washington have been trying to keep up the drum beat since the summer … we need action on the Farm Bill,” said Darisse. “We will keep up that drum beat as we talk to folks on Capitol Hill.”
It is questionable whether leaders in Congress are tuning in or out to that loud beat.
"It isn't just the differences of policy,” said Vilsack in a speech this month. “It's the fact that rural America with a shrinking population is becoming less and less relevant to the politics of this country, and we had better recognize that and we better begin to reverse it."
According to House Agriculture Committee spokeswoman Tamara Hinton, Speaker John Boehner (R-Ohio) and House Majority Leader Eric Cantor (R-Va.) said they would address the Farm Bill after the election. “It advanced out of [House Agriculture] Committee on a very bipartisan basis,” Hinton said.
Still, the Farm Bill remains on Boehner’s hefty legislative to-do list during the final leg of the lame-duck session.
Spokespersons for the Agriculture and Rules committees would provide no comment on why the bill has been held up for more than a month after the election, but made clear that it was in the majority leader’s control. Cantor’s office has provided no details as to whether the legislation will be brought to the House floor before the New Year or an extension or reauthorization option will be hashed out for the next Congress.
“I think it will come down to how the overall fiscal cliff negotiations come out,” said Darisse. “One of the reasons we haven’t gotten a bill yet is that it’s very difficult to get major legislation during an election year.”
According to Darisse, both proposals contain budget savings. “I think any part of a package needs offsets to pay for things, or as part of a broader deficit package,” he said.
The Farm Bill in both chambers consolidates programs with similar goals and eliminates direct payments, payments that went to a producer based on how much land he or she farms and their historical production. “It’s a payment that they get whether or not they produce crop on that land,” Darisse said.
The two chambers have different approaches on direct payment’s replacement. “There are significant differences between the approaches, but it’s not something I think could hold the bill up,” Darisse said.
Republican leadership’s inaction has earned harsh words from Senate leadership.
Back in October, Sen. Debbie Stabenow (D-Mich.), chairwoman of the Senate Committee on Agriculture, Nutrition and Forestry, said, "It is unbelievable that we're in this position now where the Farm Bill will expire and create so much uncertainty for farmers, ranchers, and small businesses. The Senate came together in a bipartisan way and we passed the Farm Bill. The House Agriculture Committee came together in a bipartisan way to pass a Farm Bill. It's absolutely unacceptable that the House Republican leadership couldn't devote just one day to rural America and the 16 million jobs across the country that rely on agriculture.”
Even though the Farm Bill cleared a Republican-controlled committee, the sticking point within the GOP caucus is that there is a split of support: some who believe there is not enough reform and some who believe there is too much. More conservative Republicans also say the legislation allocates too much money to food stamps.
The version passed by the Senate would cut $4.5 billion in the Supplemental Nutrition Assistance Program (SNAP) over years, a Congressional Budget Office analysis said. The House is looking to cut $16 billion over 10 years from the program.
The number of people receiving SNAP benefits is at a record high, reaching $46.6 million as of December, according to the USDA. Whether representatives feel it is wrong to make cuts during a time when more people are asking for assistance or not, regional ties are proving to be a strong factor in deciding support for the legislation, as those representing farming districts urge their colleagues towards a vote on the House floor.
“I will continue to work with Chairman Lucas, my colleagues on the Agriculture Committee and House leadership to push for a vote on the version of the Farm Bill passed back in July by the House Agriculture Committee,” said conservative Rep. Steve King (R-Iowa) last month.
Sen. Charles Schumer (D), whose state of New York ranks first in cottage cheese production and third in mozzarella and cheddar cheese production, called on the House last week to take action before year’s end. Schumer specifically voiced concern with the reenactment of the MILC program.
According to Schumer, the dairy industry has already felt a serious negative impact from the lack of a final Farm Bill and dairy farmers are already missing out on payments from the MILC program during a time of extremely high feed prices due to the U.S. drought of 2012—the most severe and extensive drought in at least 25 years, the USDA said.
“The ‘dairy cliff’ is fast approaching, and without a House Farm Bill before year’s end, it will be consumers and dairy producers alike that go over the edge,” said Schumer.
In both cases, House passage of the Senate Farm Bill is the only resolution, Schumer said.