U.S. Ag Secretary Tom Vilsack says a temporary extension of the current Farm Bill could be devastating to the nation’s dairy farmers.
Congress has been unable to pass a new, five-year Farm Bill and some lawmakers have suggested passing a three-month, six-month or year-long extension of the current Farm Bill as a stop-gap measure. Vilsack says that won’t work for the dairy industry.
“We have in place right now a process in which when prices are such that payments go out to producers,” Vilsack said. “These payments, because of the way in which the 2008 bill was structured, have substantially decreased in value this month. An extension will essentially bring that program back at September levels, not August levels.”
Nebraska’s dairy industry is worth about $172-million a year. The state has some 61,000 head of dairy cows, producing more than one-point-two billion pounds of milk a year.
The Milk Income Loss Contract (MILC) kicks in when the price of milk falls below a certain price — and that price floor fluctuates monthly.
“The difference is this: let’s say you extend it for three months. Under the old MILC program there’d be about $345 million that’d be going out over the next three months to producers, (but) under the September numbers — zero,” Vilsack says. “So it’s a huge hit to dairy at a time when dairy is really struggling.”
In addition, Vilsack says a temporary extension of the 2008 Farm Bill “doesn’t necessarily” extend disaster assistance programs for livestock producers and speciality crop farmers.
“That process expired last year. You can’t extend something that’s expired, so you have to renew it. You have to bring it back,” Vilsack says. “There’s a cost associated with that. Who’s going to pay for that?”
Vilsack says delaying passage of the next five-year Farm Bill until after the November election or until sometime next year raises the liklihood of “steeper and deeper cuts” in farm programs because the decision will be made as congress wrestles with other tax and spending issues.