Posted bhy AzBlueMeanie:
Come Dec. 31, the inability of Congress to get anything done could push the country’s milk prices to as much as $6 to $8 per gallon unless Congress passes a farm bill renewing federal support for agriculture programs. A gallon of milk could cost $8 in 2013. Here’s why.
Without legislative action in the next five days, the government will
have to revert to a 1949 dairy price subsidy that requires the
Agriculture Department to buy milk at inflated prices. Much like the
current fiscal cliff, the law was left on the books “as a poison pill to
get Congress to pass a farm bill by scaring lawmakers with the prospect
of higher support prices for milk and other agriculture products,” as
Vincent Smith, a Montana State University professor, told the New York Times.
The Farm Bill isn’t technically part of the fiscal cliff. Speaker John A. Boehner (R-Ohio.) has resisted the call by Agriculture Secretary Tom Vilsack (D) to incorporate it into the budget
negotiations — to avoid complicating the budget talks and losing GOP
votes, a Boehner aide told Politico last week. Legislators from rural districts are also worried that crop
subsidies could be a tempting target in the fiscal cliff negotiations,
so they’ve been trying to push Congress toward a separate resolution, to
little avail. Although producers would temporarily benefit from the
hike in milk prices, it would hurt processors and consumers, and the
dairy industry would prefer a long-term resolution as well.
The subsidy reversion to a higher rate will cause market instability. Steve Benen explains, GOP obstinacy may force milk price spike:
The most likely scenario would be farmers moving to sell dairy
products to the government at the inflated prices, which in turn would
limit consumer supply and cause huge price spikes on the commercial
market. It's also likely companies that use dairy products would look to
imported milk from overseas.
So, what's the problem? The Senate
version of the farm bill passed with relative ease over the summer, but
House Republicans haven't even brought a competing proposal to the floor
for a vote. GOP leaders haven't made specific demands, but the proposal
Republicans supported in committee included sharp spending cuts
to measures such as nutrition assistance programs, in the hopes of
making millions of low-income Americans ineligible for food stamps.
Democrats hope to force the issue with a discharge petition, but do not
yet have enough GOP support to push the farm bill to the floor, and
time is obviously running out.
If you want your kids to have milk with their cereal in the morning, it's time to call your congress critter and tell him or her to get mooving on this farm subsidy bill. Milk is a major part of the American nutrition program for children.