Ag leaders scramble to avert dairy cliff, extend farm bill

By Sara Wyant

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, Dec. 30, 2012 - With the clock ticking down toward the end of 2012, House and Senate Agriculture Committee leaders are scrambling to pass some type of extension for the current farm bill and suspend permanent legislation that could lead to dramatically higher dairy prices - absent any last minute moves to include farm bill language in a fiscal cliff deal.

Most of our sources indicate that prospects for a new five-year bill are now almost nonexistent, which is why House Agriculture Committee Chairman Frank Lucas, R-Okla., forged ahead with farm bill extension options.

"Clearly, it is no longer possible to enact a five-year farm bill in this Congress.  Given this reality, the responsible thing to do - and the course of action I have long encouraged if a five-year bill was not possible - is to extend the 2008 legislation for one year,” Lucas said in a statement this morning. “This provides certainty to our producers and critical disaster assistance to those affected by record drought conditions.”

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Late last night, Lucas introduced:

  • A 78-page measure that provides for a one-year extension of the 2008 farm bill, with several changes. It includes the new dairy producer margin protection plan and dairy market stabilization program, the noninsured crop assistance program, disaster assistance for livestock and trees (including an extra $125 million for fruit trees), and extends most provisions of the commodity title. Direct payment rates would be reduced from 85 percent of base acres to 82.5 percent of the base acres to “pay for” extension of some of the programs. Almost all programs that were authorized in 2012 will be authorized in this extension package, including 37 “expired” programs.
         The Congressional Budget Office (CBO) officially scored the bill, which is available: http://www.cbo.gov/sites/default/files/cbofiles/attachments/43828-OneYearAgProgramExtension.pdf  The CBO estimates the one-year extension would cost $986 million in outlays - including $664 million for disaster assistance - but the spending would be more than offset by the reduction in direct payment base acres.
  •  To see the farm bill extension legislation:

http://docs.house.gov/billsthisweek/20121224/one%20year%20extension%20of%20farm.pdf

 

Although no sponsor name is listed on the other two options, House GOP leaders reportedly wanted to keep their options open to block potential dairy price increases - in case a one-year extension can't garner enough support in the House. A full five-year farm bill has been stalled since the House Agriculture Committee passed its version in July because GOP leaders said they did not have sufficient votes for passage on the House floor.

 

The two other draft bills include:

  • An 11-page measure that extends certain provisions of the 2008 farm bill until Jan. 31, 2013 and suspends permanent law during that time. To see the document.

http://docs.house.gov/billsthisweek/20121224/one%20month%20extension%20farm.pdf

  • A 2-page bill that suspends the application of permanent law regarding milk through Jan. 1, 2013 and extends certain dairy programs. To see the document:

"The legislation posted is the result of discussions with Ranking Member Peterson and my colleagues in the Senate,” Lucas said in a statement. “It is not perfect - no compromise ever is - but it is my sincere hope that it will pass the House and Senate and be signed by the President by January 1."

Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich, also issued a statement regarding the need for quick action, while seeming to hold out hope for a new five-year bill.

 

“If a new Farm Bill is not passed in the next few days, Agriculture Committee leaders in both chambers and both parties have developed a responsible short-term Farm Bill extension that not only stops milk prices from spiking, but also prevents eventual damage to our entire agriculture economy,” Stabenow said. “It is critical that we pass a five-year Farm Bill that gives farmers and ranchers the certainty they need to plan for the future. If a new Farm Bill doesn't pass this Congress we'll soon hold another mark-up and just keep working until one is enacted next year.”

Without any action, permanent law- dating back to 1949 provisions for parity - kicks in for dairy products and potentially would require the U.S. Department of Agriculture to start buying milk at over $38/cwt. However, dairy trade groups have suggested that the Secretary of Agriculture has legal options that could delay reverting to permanent law.

Ranking member Collin Peterson, D-Minn., has long opposed an extension of the farm bill, but said he was willing to go along if dairy reform measures are included.

“Given House Republican leaders' repeated opposition to a five-year farm bill, House and Senate Agriculture Committee leadership has worked together to write an extension of the 2008 Farm Bill which includes much-needed reforms to the dairy industry. These reforms are the primary reason that I am even willing to consider any extension,” Peterson said in a statement.

“I remain opposed to other efforts that would fail to reform the dairy safety net. Given the improbability that both the House and Senate can enact long-term farm policy into law within the next 30 days, the 30 day extension approach is a poor joke on farmers that offers no certainty, just more empty promises from the Republican leadership,” Peterson added.

House leaders are expected to schedule a vote on extending the farm bill on Monday or Tuesday, but Majority Leader Eric Cantor's schedule - issued late Sunday night - makes no reference to any vote on extending the farm bill. 

Revision: This story was revised to include the CBO score.

 

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