Fiscal Cliff Bill Helps Milk Lovers, Not Farmers, Critics Say

Updated: 01/02/2013 7:11 AM By: Mark Albert

The 'Fiscal Cliff' bill that passed its final hurdle late on New Year's Day helps milk lovers, but critics say it will hurt the Minnesota dairy farmers that produce that milk, by pushing them off a "dairy cliff."

The 12-month extension of the Farm Bill stops milk prices from possibly spiking to six or seven dollars a gallon but leaves dairy farmers in limbo, experts said.

The extension continues a program for farmers to reimburse them for some losses, known as the Milk Income Loss Contract program, and prevents a possible spike in milk prices by keeping an arcane 1949 law from coming into play.

A new five-year Farm Bill, however, would have likely included an overhaul of farm policy, with new programs such as a voluntary insurance program for dairy producers and market stabilization.

Those policies had passed the House and Senate agriculture committees and passed the full Senate, but never came up for a vote on the House floor after Speaker John Boehner (R-Ohio) derisively referred to market stabilization as a "Soviet-style" program.

The National Milk Producers Federation went so far on Tuesday as to call the failure to pass a new, five-year Farm Bill "a devastating blow."

"The plan that passed (Tuesday morning) as part of the fiscal cliff package amounts to shoving farmers over the dairy cliff without providing any safety net below," declared NMPF president and CEO Jerry Kozak in a statement issued before the House voted around 10pm Tuesday night to send the extension to the president.

"This is, indeed, a blow to their efforts," Dr. Marin Bozic, a University of Minnesota dairy economist, said in an interview, referring to the NMPF. "A silver lining is that the way that the bill has been extended ensures that small dairy producers will be protected."

"It seems that consumers are the only clear winner of this extension. They will see dairy prices continue to be affordable," Bozic said.

Minnesota Milk Producers Association Executive Director Bob Lefebvre confirmed Tuesday he had been talking with the office of the state's senior senator, Amy Klobuchar, about the need for "certainty" for farmers.

In a statement to 5 EYEWITNESS NEWS late Tuesday, Sen. Klobuchar (D-MN) said: "While this Farm Bill extension will help ensure consumers don't see dairy prices skyrocket at the grocery store, I will continue to fight to pass a 5-year Farm Bill so that Minnesota producers have the support and continuity they need to succeed."

A spokesperson for Rep. Collin Peterson, the top democrat on the House Agriculture Committee who represents western Minnesota, said Peterson supported the views of the National Milk Producers Federation.

Click here to read the 'Fiscal Cliff' bill which passed the Senate and the House Tuesday (NOTE: dairy program extension language begins on pg. 130).