Expectations low for new long-term farm bill

9:00 PM, Jan 25, 2013   |    comments
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WASHINGTON -- Melrose dairy farmer Dennis Ritter is looking for some certainty he believes a new multi-year farm bill would bring, but he doubts he will find it this year.

Ritter says while he's relieved Congress approved an extension of the 2008 farm bill to avert a "dairy cliff" that could have had consumers paying twice as much for a gallon of milk, he feels lawmakers squandered an opportunity to adopt a new policy.

"It should have been so simple to get this done without an extension," Ritter said, pointing out that both the full Senate and the House Agriculture Committee had passed new five-year bills to replace the 2008 measure that expired on Sept. 30, 2012.

Given lawmakers' failure to reach an agreement -- the House bill was not even brought to the floor for consideration -- and sharp differences on farm policy, Ritter has little confidence Congress will pass a new bill before the current extension runs out at the end of this September.

"I don't have any hope that anything's going to get done," Ritter said.

With fiscal matters at the top of the congressional agenda -- lawmakers still have to address budget cuts mandated by last year's debt ceiling deal and a fiscal 2013 budget plan -- the prospects for a new long-term farm bill being passed before Sept. 30 appear uncertain at best.

While Senate Majority Leader Harry Reid, D-Nev., has placed the farm bill near the top of his to-do list for the Democrat-controlled Senate, there has been no such commitment from leaders of the Republican-led House.

House Agriculture Committee Chairman Frank Lucas, R-Okla., told reporters recently the committee had no timetable for working on a new bill.

"I wish I could say there was but there are so many pieces in place, so much that needs to be sorted out, so many issues that need to be addressed," Lucas said. "When the time is right, we go."

Rep. Collin Peterson, D-Detroit Lakes, the agriculture committee's top Democrat, is not so eager to get started on a new farm bill without some assurance from leaders of the Republican-controlled House. He blames Speaker John Boehner, R-Ohio, and Eric Cantor, R-Va., for the failure of Congress to adopt a new bill.

The Senate passed a five-year, $500 billion farm bill last June. In July, the House Agriculture Committee passed a five-year plan. But Boehner would not allow the full chamber to consider the measure, saying he believed there were insufficient votes to pass it.

In a Jan. 3 letter to Boehner, Peterson called Boehner's claim "patently false" and said it would be a "fool's errand" for the committee to craft a new farm bill proposal without a guarantee House leaders will bring it to the floor.

In sitting on the bill, Peterson said, Boehner had reneged on his pledge during a 2011 inaugural address as speaker to let the House "work its will" on legislation.

"Given your long-standing opposition to farm programs and previous farm bills, it was no surprise that there were provisions in the bill that you could not support," Peterson wrote. "But instead of allowing those objections to be aired in an open debate . . . , the Republican leadership bottled up the committee's farm bill and drafted alternatives in the speaker's and majority leader's offices, bypassing both the chairman and members of the Agriculture Committee and making a mockery of regular order."

Boehner's office did not respond to a request for a comment.

During a recent interview, Peterson said he has not heard from Boehner in response to his letter and doesn't expect to.

"I don't see at this point that anything has changed," Peterson said.

Peterson is the author of a provision in the House bill that overhauls the dairy support programs. Under his plan, the Dairy Product Price Support Program and the Milk Income Loss Contract, which pays farmers when milk prices fall below a certain level, would be replaced with a risk management insurance program and market stabilization designed to curb overproduction.

While dairy farmers like Ritter object to market stabilization as supply management, Peterson said the new system could keep some dairy farmers from going out of business.

"The dairy program is cheaper under this new system," Peterson said. "And it gets farmers within 80-90 percent of the cost of production when we get into an oversupply situation."

Peterson recalled the dairy price collapse in 2009 that caused many dairy farmers to go bankrupt. He said the same thing could happen because of the failure of Congress to adopt a new policy.

"If we have a collapse in dairy prices, because of what happened in '09 we're going to lose a ton of dairy farms," Peterson said.

Jerry Kozak, president of the National Milk Producers Federation, agreed. He said the farm bill extension that was included in the deal to avert the "fiscal cliff," an onset of tax hikes and budget cuts, has left dairy farmers without a safety net.

Kozak said the market stabilization initiative, first proposed by his group, has been mischaracterized as supply management. He said without controls over production, risk management won't work because it would become too costly.

The program would have saved taxpayers $140 million over five years, Kozak said, "yet you had some conservative Republicans criticize it, including Speaker Boehner who called it a "Soviet-style" program.

Kozak said he is optimistic Congress will not let the current extension lapse without passing a new farm bill because lawmakers have become sensitized to the "dairy cliff." Without a new policy or another extension, agriculture programs would be governed by rules passed in 1949, something known as permanent law. Under that scenario, milk prices would double.

Reports on the "dairy cliff" was a "big eye-opening experience here for much of Congress, the White House and others who didn't understand the impact of inaction on dairy farmers," Kozak said. "I don't think they're going to let time run out again and revert back to permanent law."

Kevin Paap, president of the Minnesota Farm Bureau, is not so sure based on what happened under the previous Congress. But he said his group has not abandoned hope.

"We were very frustrated by not being able to have a five-year farm bill by the deadline," Paap said. "The agriculture committee did its work. We felt like we did our work. It would have been just as easy to have a debate on a five-year bill so farmers could have some certainty" instead of settling for an extension.

Paap said while the farm bureau recognizes the need for reform in the dairy programs, it doesn't support the market stabilization proposal.

"If it was a perfect world, our choice would be to not have supply management," Paap said. "We're going to continue to work on a five-year farm bill that meets our principles."

In the end, Melrose dairy farmer Ritter just wants to see some stability and a little more parity between production costs and what he earns on his 50-cow, 194-acre farm.

"Our income fluctuate so much versus our costs," Ritter said. "Our input costs are just going wild, especially the feed cost. Prime hay is over $300 a ton. We have no stability whatsoever as far as milk prices go. If we get one more drought, we're going to have chaos in this country."

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