- The Washington Times - Tuesday, January 1, 2013

While congressional leaders have reached a deal to avoid milk prices from skyrocketing in the coming weeks, the proposal was in limbo Tuesday as it was piggybacked onto the stalled measure intended to avoid the nation falling off the “fiscal cliff.”

The leaders of the Senate and House agriculture committees — Sen. Debbie Stabenow, Michigan Democrat, and Rep. Frank D. Lucas, Oklahoma Republican — over the weekend brokered an eleventh-hour deal to extend the 2008 “farm bill,” which expired three months ago, through September. The proposal would keep intact a key dairy price support program which compensates producers when domestic milk prices fall below a specified level.

The Senate passed the package shortly after 2 a.m. Tuesday. But House Republicans have balked at the fiscal cliff portion of the measure, meaning the federal Agriculture Department will end the dairy price support program and revert to the terms of the 1949 farm bill — the last permanent farm bill written into law.

Milk prices likely won’t shoot up immediately without a new farm bill, as the Agriculture Department could delay or tweak implementation of some aspects of the 1949 law. Milk producers also may decide to absorb their cost increases for awhile instead of jacking up the price of dairy products.

But many industry officials and lawmakers warn a gallon of milk could double to $6 or $7 in the first weeks or months of 2013 unless Congress acts soon.

Industry officials say they don’t know exactly when consumers will see milk prices increase, or how much, because the situation is unprecedented.

Ms. Stabenow said she was “disappointed” and “angry” that Senate Minority Leader Mitch McConnell, Kentucky Republican, insisted on a slimmed-down farm bill extension, a move that cut funding for farm energy and conservation programs, specialty and organic crops, and disaster relief. But she said she reluctantly agreed to it in part to prevent consumers from paying more for milk.

“It’s an extension of the things that Mitch McConnell thinks are important,” she said. “But I’m on the record very strongly opposing what was done for agriculture.”

McConnell spokesman Michael Brumas responded: “Sen. McConnell put forward a bipartisan, responsible solution that averted the ‘dairy cliff’ and provided certainty to farmers for the next year without costing taxpayers a dime.”

Ms. Stabenow said she is “bound and determined” to include provisions that were cut in the current proposal in a multiyear farm bill her committee will soon begin work on.

The nonpartisan Congressional Budget Office estimated that extending the entire bill through September — as Ms. Stabenow and Mr. Lucas had suggested — could cost more than $1 billion this budget year.

The extension called for modest cuts in a controversial farm subsidy known as “direct payments,” which pays farmers whether they farm or not. According to the CBO, the extension would cut $1.3 billion from the subsidy’s $50 billion cost over 10 years. The House and Senate farm bills eliminated that subsidy completely.

Farm bills, while large and complex, typically are among the most bipartisan legislative matters on Capitol Hill. The Democrat-run Senate passed a five-year, $500 billion farm bill in June with wide bipartisan support.

But the Republican-controlled House rejected the Senate measure, then failed to pass their own version.

This article was based in part on wire service reports.

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