Congress Desperate to Avoid 'Dairy Cliff', $8 Gal Milk
With time running out to reauthorize a 5-year Farm Bill, sources on Capitol Hill tell Breitbart News that Congressional leaders are preparing a short-term, one-month extension to allow more time for negotiations. Congress is desperate not to let the Farm Bill expire on December 31st. If it does, a decades old law would be triggered, causing the price of a gallon of milk to spike to $8 or more a gallon.
If the Farm Bill expires, farm programs revert to permanent law, passed in 1949. That law would require the federal government to buy milk and dairy products from producers at around twice the market rate. The government would also be required to maintain that price level through additional buying. It is estimated it would cost the government $12 billion a year to support the higher milk price level.
The provision is a good reminder that subsidies and crony capitalism is not a recent phenomenon. The agriculture industry held considerably more political power last century than it does today. The legacy of their lobbying power is still felt today.
In recent years, the Farm Bill has evolved away from the traditional crop subsidies we associate with the legislation. Today, 80% of the spending in the $500 billion bill is consumed by food stamps. That program, in fact, has been the main sticking point between negotiators trying to reach a deal.
Those arcane farm programs still have power, however. No lawmaker wants to go into an election year with milk spiking to $8 a gallon and other dairy products becoming more expensive. It also means the Farm Bill, no matter how antiquated in today's market of massive agri-business corporations, will never really go away.