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Posted January 4, 2013 | comments Leave a comment

Farm Bill extension keeps milk prices down, but causes sour feelings

By Sally Voth

While Congress' extension of the Farm Bill was a relief, many farmers are still holding their breath.

The nine-month extension of the bill was included in the fiscal cliff package passed on New Year's Day, but didn't include funding for some programs dealing with organic farming, the environment and renewable energy.

Direct payments, which subsidize farmers whether or not they actually farm and costs taxpayers $5 billion annually, were continued however.

Had the extension not passed, a dramatic rise in milk prices was forecasted.

Many of the Farm Bill programs that the Virginia Farm Bureau was concerned about actually expired in October, following the end of fiscal 2012, said Wilmer Stoneman, associate director of governmental relations at the bureau.

"We've been working on one for almost two years now," Stoneman sad.

He said Congress had promised to take up the issue after the November election, but got bogged down in the fiscal cliff issue, which led to the recent extension.

If the bill hadn't been extended, the bill would have gone back to 1949 parameters, according to Stoneman.

"That's what a lot of people expected to happen if we didn't pass a Farm Bill," he said.

It's also what led to talk of sky-high milk prices, he said.

"It would go back to the [19]49 framework," Stoneman sad. "You set prices for milk in 1949 terms, but with 2012-13 prices and economic conditions. That's what would've doubled the price of milk."

The Farm Bill was last amended about six years ago, and amendments generally are good for about five or six years, according to Stoneman.

"It's not so much a Farm Bill as a funding for USDA authorization bill," he said.

"The good news is we have got something to work with, and a little time to work with," he said.

The U.S. Department of Agriculture provides funding for about a dozen title programs, ranging from conservation to crop protection to nutrition.

He said amendments supported by the Farm Bureau would've cut USDA funding by about $26-$30 billion, on terms more acceptable to the bureau.

Stoneman said the main thing the Virginia Farm Bureau was interested in was keeping funding for conservation efforts, such as water quality, and having a viable crop insurance program.

Virginia farmers are currently less concerned about funding for subsidies because for the past few years there have been good prices on grain and commodities. They are concerned about dealing with disasters, though, Stoneman said.

"Now, farmers across the nation may have different attitudes, but that's what we've been focusing in on," he said.

Even with the extension, farmers are in a "sticky situation," with the possibility of more budget cuts than planned as budget negotiations go on, Stoneman said.

"We also recognize that the rest of the nation is suffering economically, and the debt is pretty high," he said. "It just sends us almost back to the drawing board. The real problem is it's difficult for farmers to plan for this particular coming spring with [this] uncertainty. To a certain degree, that's alleviated by the extension. But, it's still a considerable amount of uncertainty in the future."

One of those farmers feeling uncertain is Mary Eaton, whose family owns a dairy farm in New Market.

"It's still uncertain about a lot of things, really, it's uncertain about almost everything," she said. "We're not confident that everything's over with, but we're thankful that it did pass, that it stayed in place."

Making so much money on milk would've been good news for her family -- who milk 125-150 cows a day -- but Eaton was concerned about other families.

"We were afraid people wouldn't be able to afford the milk we're producing," she said. "Plus, families need it. We know they need the milk. We didn't want to see everybody suffer because of the government's help that they give us, the subsidy that they have."

Also among those unhappy with Congress' action is the National Sustainable Agriculture
Coalition. The organization posted a news release on its website, sustainableagriculture.net.

"The deal is blatantly anti-reform," the release states.

It decries the continuation of the direct payment subsidies, and the omission of funding for conservation and reform efforts.

"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," the release states.

The Associated Press contributed to this report.

Contact staff writer Sally Voth at 540-465-5137 ext. 164, or svoth@nvdaily.com

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