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Congress Extends Farms Programs into 2013 to Avert Dairy Cliff

January 8, 2013

The quest to pass a new farm bill will remain NMPF’s main focus in 2013, after a last-minute fiscal cliff deal in Congress on New Year’s eve extended existing farm programs – including key dairy programs – into 2013.

“We will spend the coming months figuring out how to move farm policy forward. The status quo is not an acceptable outcome, either for farmers or taxpayers,” said Jerry Kozak, President and CEO of NMPF. The fiscal cliff package, among other things, extended the MILC program through Sept. 30th, 2013, and the price support program through Dec. 31st of this year.

Thousands of news stories in the last two weeks of December speculated that consumers would face a dairy cliff after January 1st: the return of the 1949 agriculture law that potentially could double farm-level milk prices. During a post-Christmas lame duck session, Congress considered including the Dairy Security Act – the new margin insurance-based safety net for dairy farmers – in the overall farm bill extension as a way to prevent the permanent law from returning. In the end, however, most existing programs were extended.

“As 2012 ended, we helped make visible the need to create a better dairy policy for farmers. Returning to the 1949 law is not a viable long-term solution, but neither is the system we still have, featuring price supports at ineffectively low levels, along with direct payments that don’t recognize the realities of today’s dairy sector. We need to keep that need visible in 2013 so we end up with a better system,” Kozak said.

Kozak did express satisfaction that the overall fiscal cliff deal prevented the estate tax from returning at punitively high levels in 2013. The fiscal cliff package includes a 40% rate on estates valued at more than $5 million, up from the previous 35% rate, but far less than the 55% top rate on $1 million estates that could have become permanent absent the new package.