During the closing days of 2012, Congress tackled an array of budgetary and fiscal matters that would have potentially pushed America over the fiscal cliff. Agriculture found itself in the midst of the deficit debate as lawmakers wrestled with how to address farm programs scheduled to expire on December 31, 2012.
As part of the fiscal cliff compromise package, Congress opted to pass a nine-month extension of many of the programs contained in the 2008 Farm Bill. The extension of the Farm Bill was needed to avoid the long-term effects that could have occurred if farm programs reverted back to the 1949 Act, otherwise known as “permanent law.”
For dairy, this means farm safety net programs authorized through the 2008 Farm Bill will continue to operate in 2013 much like they did in 2012. The legislation extended the Dairy Export Incentive Program and the Dairy Product Price Support Program through December 31, 2013, along with the Milk Income Loss Contract (MILC) program, which was extended until September 30, 2013.
Under MILC, the legislation will pay producers on 45 percent of production with a base feed cost of $7.35 per hundredweight until August 31, 2013. In September 2013, payments will be reduced to 34 percent of production with a base feed cost of $9.50 per hundredweight. The legislation also provided retroactive payment to producers for late 2012 production. U.S. Department of Agriculture (USDA) has reported that producers will receive payments on September and October 2012 milk marketings. The September 2012 payment rate is approximately 59 cents per hundredweight, while the October 2012 payment rate is approximately 2 cents per hundredweight. MILC did not trigger during November or December 2012.
Unfortunately, the most recent Farm Bill extension failed to provide funding for many commonly used agriculture disaster aid programs designed to support producers dealing with recent livestock and forage losses due to natural disasters. These programs include the Livestock Indemnity Program, Livestock Forage Program, Emergency Livestock Assistance Program, Noninsured Crop Disaster Assistance Program and the Tree Assistance Program, among others.
Funding for these programs is a priority for DFA and its producer-leaders. Already this year, 597 counties in 14 states have been designated disaster areas by USDA. DFA is diligently working with others in the agriculture sector in urging Congress to adequately fund these disaster assistance programs.
Timeframe for the next Farm Bill
The 2013 legislative calendar already includes a bevy of issues, including raising the debt ceiling, addressing looming sequestration cuts, debating gun control legislation and developing comprehensive immigration reform legislation. Recently Sen. Debbie Stabenow (D-Mich.), chair of the Senate Agriculture Committee, and Rep. Frank Lucas (R-Okla.), chair of the House Agriculture Committee, have expressed their commitment to passing a multi-year Farm Bill this year.
In the Senate, Stabenow has said she plans to work on a bill “as soon as possible,” but as of this writing, no timetable has been set. Action by the Senate Agriculture Committee could occur sometime this spring. Over in the House, Rep. Collin Peterson (D-Minn.), former chair and ranking member of the House Agriculture Committee, is working with Lucas and seeking assurances with Speaker John Boehner (R-Ohio) to ensure the Farm Bill receives floor time once the committee takes action.