Report: Milk Could Skyrocket To $8 A Gallon If Farm Bill Not Passed
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WASHINGTON (CBSDC/AP) — 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.
(TM and © Copyright 2013 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2013 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)