Farmers See Good, Bad Outcomes Of Fiscal Cliff Bill

America’s farmers and ranchers are digesting a mixed signal that came from the last-minute extension of federal farm legislation in a bill dealing with the federal budget.

While the bill restored farm programs that technically mostly disappeared on Oct. 1, a key congressman thinks the dairy industry is left at risk and farmers must wait until later this year to see if what they think are important changes will be made in federal farm policy.

Basically, nothing changes in federal farm policy from how things operated the past five years, despite a couple years’ efforts to rewrite federal law dealing with how Washington supports farmers.

For the agriculture community, the good news is that federal programs are set for the next growing seasons. Uncertainty leading up to Tuesday’s vote left farmers and ranchers wondering how to plan for 2013.

For consumers, the good news is that milk prices will not soar to $9 a gallon, which some predicted if federal law was allowed to revert to its mid-1900s stage without Tuesday’s legislation.

But for dairy farmers, U.S. Rep. Collin Peterson, D-Minn., worries that too many of them will end up going bankrupt because existing law does not give them enough protection.

Farm group leaders are upset that Congress did not vote on a new farm bill after months of work.

“Bad for family farmers and ranchers, bad for the country,” President Woody Barth of the North Dakota Farmers Union said.

Many farm groups sought changes that would have given farmers protections, such as in the case of bad weather, while eliminating controversial direct payments to farmers.

Minnesota Farmers Union President Doug Peterson and others said the new farm bill may indicate that farm state politicians have less clout than they used to and that ag interests have less relevancy in Congress.

Collin Peterson holds clout within the House Agriculture Committee, which he led when Democrats were in charge, because Republicans cannot pass a bill without support from his Democrats. But he could not get a new farm bill included in Tuesday’s legislation, so Wednesday he said he only will work on a new bill if Republican House leaders agree to let it make its way through the committee process and end up with a full House vote.

The congressman said he was writing a letter to GOP leaders Wednesday telling them he would not help with a new farm bill unless he receives that promise.

The bill-writing process, which started a couple of years ago, must start again when a new Congress is sworn in today. The House Agriculture Committee will have so many new members that the bill needs to begin at the beginning, Peterson said.

“We can live with the current law,” Peterson said. “You are going to be making direct payments to farmers that you cannot justify, but we can live with it.”

On the other hand, the House Agriculture Committee’s ranking Democrat added, “the one thing we can’t live with is the current dairy policy.”

When milk prices rose, farmers added too many milk cows, which led to overproduction, Peterson said. That has driven milk prices lower, which could lead to widespread bankruptcies among dairy farmers, he said.

In California alone, the drought has raised feed prices so much that 150 dairy farmers (out of 1,600) are expected to declare bankruptcy this month alone, he said.

“If dairy prices collapse, I’m going to tell farmers to call the president,” he added.

The news is better for Midwest dairy farmers, Peterson said, but they remain vulnerable.

The committee-approved farm bill, which never reached the full House, would have provided a safety net for dairy farmers.

While Peterson is upset with the farm bill situation, the House agriculture chairman supported the New Year’s bill, saying it prevents tax increases that would have hurt farmers and ranchers.

“Further,” Rep. Frank Lucas, R-Okla., said, “this bill provides a one-year extension of the 2008 farm bill, which gives agricultural producers certainty and allows the agriculture committees in Congress to continue working on a five-year comprehensive farm bill.”

Lucas did not relieve Peterson’s angst.

The ag committee cut $35 billion in the bill it passed, but House leaders never allowed the full body to consider. That cut was sought by top Republicans, but Peterson said other committees did not comply by finding cuts in their parts of the budget.

“The committees that were irresponsible and didn’t do their work got what they wanted, and the Agriculture Committee got screwed,” Peterson said. “It is a little hard for me to swallow.”

“The message it sends to me is don’t do your job, don’t be responsible, because we were disrespected.”

Peterson has a bipartisan distaste about the process, including Democratic President Barack Obama and congressional leaders of both parties who made farm bill decisions with little input from others: “I’m not happy with anyone.”

“Going forward, we have this whole mess coming,” Peterson said. “And, frankly, the way this place operates I won’t have anything to say about it. It is going to be done at a high level.”

Peterson sounded pessimistic. “Until we get some sensible people down here…” he said before his voice trailed off.

Jonathan Knutson of Agweek magazine contributed to this story.