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'Dairy Cliff' Averted Through 9-Month Extension of Farm Bill
Wisconsin Ag Connection - 01/02/2013

The New Year's holiday had no shortage of drama in Washington, D.C. as lawmakers worked right up to the finals minutes of the 112th Congress to save the country from the so-called fiscal cliff and the dairy cliff--which refers to the ramifications of allowing the 2008 farm bill to expire without new provisions that dictate dairy policy. In the end, the House passed a deal on a vote of 267-157 that would extend the 2008 farm bill over the next nine months, which allocates spending on food stamps, crop subsidies and a temporary extension of the Milk Income Loss Contract Program.

Rep. Reid Ribble of Appleton--who is Wisconsin's lone member on the House Agriculture Committee--said without the fix, dairy pricing mechanisms used in the 1940s would have kicked in, causing retail milk prices to double in the grocery stores.

"The Milk Income Loss Contract program has provided an important safety net for Wisconsin dairy farmers when milk prices drop drastically and feed costs rise," Rep. Ribble said in a statement last night. "Without further legislative action, the MILC program would have expired and dairy price supports would have dramatically risen, saddling our dairy market with major uncertainty and causing consumer prices to skyrocket."

As House and Senate members battled with other matters of business, they didn't touch a proposed change to how milk is priced through the controversial Dairy Security Act, which was included in the Senate's version of the farm bill last summer. Drafted and endorsed by the National Milk Producers Federation, the DSA is a voluntary margin protection program that could set quotas on production levels under certain scenarios in order to control the supply-and-demand ratio.

"These stop-gap efforts don't even qualify as kicking the can down the road," NMPF CEO Jerry Kozak said in a news release. "Despite the progress made in 2012 on the farm bill, we're starting 2013 on a bad note. We oppose any farm bill extension of any duration that does not contain the Dairy Security Act, and resolve to work this year on achieving that as a long-term goal."

The National Farmers Union also penned a few unflattering remarks on New Year's Day, noting that the bill 'does not provide mandatory funding for the energy title, specialty crops and organic provisions, and new important programs for beginning farmers and ranchers.'

Other key provisions in the fiscal cliff deal would preserve the Bush tax cuts for individuals making less than $400,000 per year, and couples under $450,000 annually. It would also make permanent a top estate tax rate of 40 percent. The legislation does not authorize the Congress to increase the federal debt limit from its current levels.

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