Rep. Kind: We Must Act Now to Avoid 'Dairy Cliff'
Wisconsin Ag Connection - 12/26/2012
The so-called looming fiscal cliff isn't the only urgent matter of business on people's minds in rural America. Wisconsin Congressman Ron Kind says he is pushing his colleagues to move quickly to avoid going over the 'Dairy Cliff,' as well on December 31.
The La Crosse Democrat says recent reports indicated that House leadership will not take up a Farm Bill before the end of the 112th Congress, which could wreak havok on the way milk prices are determined.
"Failing to take up a Farm Bill will take us back to the outdated agriculture policies of 1949," Kind said last week. "This would devastate the dairy market and unnecessarily burden consumers who would bear the brunt of higher prices."
Kind explains that when Congress passes a five-year farm bill, they include a provision to suspend what is known as 'permanent law,' which are policies that date back to the 1930s and 1940s. He says without action yet this year, the nation's agricultural policy would revert back to price controls from more than 60
years ago when the government used a complex formula to set milk prices for farmers based on the cost of their inputs.
"If a Farm Bill is not addressed, USDA would be required to implement these old price controls and the government would have to start buying dairy products at nearly double recent market prices to drive up the price of milk to cover dairy producers' costs," he said. "Retailers and other businesses would have to
pay more than the government rate to buy dairy products. The cost of milk and other dairy products would then skyrocket for consumers and businesses."
Experts say reverting back to those policies could cost taxpayers as much as $15 billion over the next year and would be disastrous for the dairy industry.