Two key farm-state lawmakers back plan to avoid jump in dairy prices

Washington - House Agriculture Committee Chairman Frank Lucas, R-Okla., and Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., backed a short-term extension of a farm law that lapsed Sept. 30 as the Obama administration warned that unless Congress acts, retail milk prices could almost double.

"It is no longer possible to enact a five-year farm bill in this Congress," Lucas said in a statement Sunday. The "responsible thing to do," he said, "is to extend the 2008 legislation for one year. This provides certainty to our producers and critical disaster assistance to those affected by record drought conditions."

Stabenow said Sunday in a separate statement: "While the Senate passed a bipartisan five-year farm bill in June that cut subsidies and reduced the deficit, the lack of action by the House Republican leadership has put us in a situation where we risk serious damage to our economy unless we pass a temporary extension."

Three farm-related bills were filed Saturday in the House of Representatives; all of them would stave off the potential jump in consumer milk prices should government commodity programs begin to lapse Jan. 1. One would extend current law, along with disaster aid for producers affected by this year's U.S. drought and changes to current milk policy. The second measure is a shorter-term extension, and the third would protect only against possible dairy-price spikes.

The most recent farm law, enacted in 2008, expired after attempts to pass a new five-year proposal failed. Without that plan, agricultural programs automatically return to rules passed in 1949, the basis of all subsequent legislation.

The effects of that transition have been delayed because of the growing seasons of different crops. Dairy production, a year-round business, is the first major commodity affected. In November, the U.S. Department of Agriculture put the price of a gallon of fresh whole milk at just under $3.54.

Under President Harry Truman's farm policy, the government bought supplies of a product until its price reached "parity" with the cost immediately before World War I. Adjusted for a century of inflation, the Agriculture Department's milk-support price today would be $39.08 per hundred pounds, more than double the dairy futures price in Chicago on Dec. 28.

Agriculture Secretary Tom Vilsack warned Sunday that consumers will pay the price without a new farm bill.

"Consumers, when they go in the grocery store, are going to be a bit shocked when instead of seeing $3.60 for milk, they see $7 a gallon for milk," he said on CNN's "State of the Union" program. "That's going to ripple throughout all of the commodities if this thing goes on for an extended period of time."

Lawmakers are considering a farm package as part of a resolution to the larger budget dispute involving more than $600 billion in tax increases and spending cuts set to take effect Jan. 1. Stabenow, who also appeared on CNN, said she has been frustrated with congressional inaction on the agriculture law, which funds food aid to poor families as well as subsidies to growers of corn, cotton and other crops while lowering projected federal spending, according to the Congressional Budget Office.

"I have $24 billion sitting on a farm bill in cuts we passed to the House," she said. "The House won't take it up."

The U.S. Senate approved a five-year farm bill costing roughly $100 billion a year in June. The House Agriculture Committee approved its version in July; that plan never received a vote in the full chamber.

"If the leadership were waiting until the last minute," said Senator Pat Roberts of Kansas, the top Republican on the Senate Agriculture Committee, "we're sure as hell there."


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