Wednesday, January 02, 2013

Farm Bill extension favors status quo, big players; leaves many members and interests upset

The "fiscal cliff" package that passed Congress last night "includes a nine-month Farm Bill extension that forestalls any immediate spike in milk prices but also represents a bitter blow for farmers who had hoped for long-sought changes in the dairy support program," David Rogers reports for Politico. "The upshot is a victory for Southern agricultural interests with the greatest stake in a costly system of direct cash payments to often already profitable producers. In the dairy arena, giant processors like Dean Foods Co. come out ahead while the outcome is a major blow for the National Milk Producers Federation, which watched with disbelief from the sidelines," as did the Sustainable Agriculture Coalition.

The latter group's policy director, Ferd Hoefner, told Rogers: “Many smaller, targeted programs to fund farm and food system reform and rural jobs . . . were left out completely. . . . The message is unmistakable — direct commodity subsidies, despite high market prices, are sacrosanct, while the rest of agriculture and the rest of rural America can simply drop dead.”

Senate Agriculture Committee Chairwoman Debbie Stabenow of Michigan railed against the farm language inserted by Republican Leader Mitch McConnell, but the Obama administration took its lumps from other farm-state Democrats for going along. Rep. Collin Peterson of Minnestota, left, ranking Democrat and former chairman of the House Agriculture Committee, was more than upset. He told Rogers, “Upset is an understatement. I’m not going to talk with those guys. I’m done with them for the next four years. They are on their own. They don’t give a shit about me, anyway.”

Republican sources told Agri-Pulse that McConnell feared another senator would raise a point of order against the extension drafted by Stabenow and House committee Chairman Frank Lucas, R-Okla., because of its budget implications. "McConnell also listened carefully to objections from House Speaker John Boehner, R-Ohio, who is adamantly opposed to the dairy reform provisions that the committee chairs had included," Agri-Pulse reports.

Looking ahead, Rogers writes, "Beyond dairy, the outcome is a wake-up call to the entire farm lobby of its weakened political standing in Washington and need to avoid so much infighting. As agriculture has grown more concentrated, it commands fewer votes. Indeed, consumer fears about milk prices drove the deliberations more than dairy farmers. And in these tough economic times for the nation, the farm sector has been enjoying relative prosperity and in the eyes of many lawmakers has become more complacent politically." (Read more)

The overall bill includes "several tax provisions [that] affect farmers and ranchers, including an estate tax set at a new 40 percent rate on estates valued at more than $5 million, up from the 35 percent rate in effect for 2012," Agri-Pulse notes. "The estate tax, known as the 'death tax' in agricultural circles, threatened to revert back to the $1 million exemption and the 55 percent top tax rate had Congress taken no action." Agri-Pulse is subscription-only, but offers a free four-week trial, here.

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