Posted on 10/29/2013 7:00:50 AM PDT by rickmichaels
The fight over renewing the nation’s farm bill has centered on cuts to the $80 billion-a-year food stamp program. But there could be unintended consequences if no agreement is reached: higher milk prices.
Members of the House and Senate are scheduled to begin long-awaited negotiations on the five-year, roughly $500 billion bill this week. If they don’t finish it, dairy supports could expire at the end of the year and send the price of a gallon of milk skyward.
KLTV reports that the price of milk could reach $8 a gallon.
“We are pretty much at the mercy of the people that are going to pay us. We have no control over the milk price,” dairy farm manager Bear Vanderwier told KLTV.
There could be political ramifications, too. The House and Senate are far apart on the sensitive issue of how much money to cut from food stamps, and lawmakers are hoping to resolve that debate before election-year politics set in.
Minnesota Sen. Amy Klobuchar, a Democrat who is one of the negotiators on the bill, says the legislation could also be a rare opportunity for the two chambers to show they can get along.
“In the middle of the chaos of the last month comes opportunity,” Klobuchar says of the farm legislation. “This will really be a test of the House of whether they are willing to work with us.”
The farm bill, which sets policy for farm subsidies, the food stamps and other rural development projects, has moved slowly through Congress in the last two years as lawmakers have focused on higher-profile priorities, like budget negotiations, health care and immigration legislation.
But farm-state lawmakers are appealing to their colleagues to harken back to more bipartisan times and do something Congress hasn’t done very much lately — pass a major piece of legislation.
Even President Barack Obama, who has been largely silent on the farm bill as it has wound through Congress, said as the government reopened earlier this month that the farm bill “would make a huge difference in our economy right now.”
“What are we waiting for?” Obama said. “Let’s get this done.”
The main challenge in getting the bill done will be the differences on food stamps, officially called the Supplemental Nutrition Assistance Program, or SNAP. The House has passed legislation to cut around $4 billion annually, or around 5 percent, including changes in eligibility and work requirements. The Senate has proposed a cut of around a tenth of that amount, and Senate Democrats and President Obama have strongly opposed any major changes to the program.
The cost of SNAP has more than doubled over the last five years as the economy struggled, and Republicans say it should be more focused on the neediest people. Democrats say it is working as it should, providing food to those in need when times are tough.
“I think there are very different world views clashing on food stamps and those are always more difficult to resolve,” says Roger Johnson, president of the National Farmers Union.
Johnson says coming together on the farm issues, while there are differences, will be easier because the mostly farm-state lawmakers negotiating the bill have common goals.
Passing a farm bill could help farm-state lawmakers in both parties in next year’s elections, though some Republicans are wary of debating domestic food aid in campaign season. Republican House leaders put the bill on hold during the 2012 election year.
One way to pass the bill quickly could be to wrap it into budget negotiations that will be going on at the same time. The farm bill is expected to save tens of billions of dollars through food stamp cuts and eliminating some subsidy programs, and “that savings has become more key as we go into budget negotiations,” Klobuchar said.
If that doesn’t work, lawmakers could extend current law, as they did at the end of last year when the dairy threat loomed. But Senate Majority Leader Harry Reid, D-Nev., has said he wants to finish the bill and won’t support another extension.
One of the reasons the bill’s progress has moved slowly is that most of farm country is enjoying a good agricultural economy, and farmers have not clamored for changes in policy. But with deadlines looming, many say they need more government certainty to make planting decisions. Most of the current law expired in September, though effects largely won’t be felt until next year when the dairy supports expire.
If Congress allows those supports to expire, 1930s and 1940s-era farm law would kick in, as much as quadrupling the price that the government pays to purchase dairy products. If the government paid that high a price, many processors would sell to the government instead of commercial markets, decreasing commercial supply and thus also raising prices for shoppers at grocery stores.
Some farmers are feeling the effects of the expired bill already. An early blizzard in South Dakota earlier this month killed thousands of cattle, and a federal disaster program that could have helped cover losses has expired.
Rep. Kristi Noem, R-S.D., also a negotiator on the conference committee, says her constituents aren’t concerned with the differences between the House and Senate versions of the bill, but they just want to see a bill pass.
“Maybe the biggest question is can we put together a bill that can pass on the House and Senate floor,” she said.
we’ll have to drink more wine!
Okay....stop the price supports and subsidies and I’ll pay $8/gal for milk. This has to stop everywhere - especially with ethanol.
Agree.
Markets correct. Let’s get back on the prices that actually allow us to support the farmers. Then we can stop having the government subsidize our food supply and whine about us getting fat.
I don’t really care. I say stop them entirely. We, government, have no business subsidizing ANYTHING.
They could always just repeal the stupid 1947 law that would cause the price spike in the first place. But that would make sense. And then they wouldn’t be able to continue their subisidies (payoffs) to get reelected.
OK, but what would the Gubermint do with all those dairy products? And is the gubermint forced to buy them? Heck, Øbama could simply issue a waiver and part the white sea.
Let's see the Republican House put forth a single bill sunsetting that 1930's law and take it out of play. See what the Senate and Obama do about that.
Agreed as well. Just as water seeks its own level there will be turbulent times in the immediate aftermath of cessation of subsidies but things would eventually find a new “normal”.
Putting food stamps in with farmer subsidies is a clever but evil ploy to allow rats to hold farmer’s (and R’s in farm states) hostage to force food stamps to ever increase.
$8 a gallon is fine with me... It shouldn’t be subsidized.
Milk is a hot button/red herring issue to hide the real tax increase and get support for phony issues.
Who will buy milk at $8/gallon. Very few people. The dairies can either let their surplus milk go sour, or they can reduce the price. They won't make very much money dumping the milk. Milk doesn't have a very short shelf life.
This matter will be resolved in a matter of weeks.
THE necessary Farm Bill is the one that gets the government entirely out of the dairy business.
Let the market control the price.
I’d like to see a lot more raw milk available, but I live in a rural area.
I’ll just have to add it to the list of things I no longer buy like Orange Juice.
And we have the added benefit that even the wild explosion of milk prices wouldn’t affect the CPI, the whatever this abortion of a government uses to track prices, one frigging bit!
They don’t use milk, butter, bread, meat - whatever to track inflation.
This is the biggest pile of cow pies I’ve seen in a long time. Diary farmers are required to buy quota just like any other product. You remove price supports and quotas and the market would correct itself in a very short period of time. Right now if you produce over your quota based upon volumn and butterfat you are penalized.
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