"Milk Cliff" Averted, Too

By: CBS/AP (Posted by Kion Hudson)
By: CBS/AP (Posted by Kion Hudson)

(CBS/AP)-- The "fiscal cliff" is not the only "cliff" averted in Congress' last-minute negotiations: The so-called "milk cliff" was also avoided - for now. As part of the "fiscal cliff" deal, Congress passed a temporary extension of several agriculture subsidies, including one that would avoid a drastic spike in milk prices.

Because Congress was unable to pass an extension of the farm bill before the end of the year, milk prices were expected to rise to $7 or $8 a gallon in the new year because the milk subsidy program would revert back to an antiquated formula that was implemented in 1949. But a provision written by "fiscal cliff" negotiator Senate Minority Leader Mitch McConnell, R-Ky., was added to the "fiscal cliff" bill and Congress passed a nine-month extension of the current subsidy program, which will keep milk prices stable.

While the fix takes care of the most immediate concern to most Americans - milk prices - it also extends $5 billion worth of government subsidies for commodities such as corn and soybeans, regardless of whether farmers grow crops. While farmers covet the expensive subsidy, critics decry it as wasteful, misdirected government spending.

Other programs, however, were cut, including conservation, organic growing, and fruit and vegetable programs.

Senate Agriculture Committee chairman Sen. Debbie Stabenow, D-Mich., praised the last-minute extension of the dairy program, but said she was disappointed in the contents of the rest of the bill. "I am deeply concerned that Republican Leader Mitch McConnell insisted on including an incomplete Farm Bill extension that ends funding for important parts of the bill," she wrote in a statement. "Senator McConnell insisted on a partial extension that reforms nothing, provides no deficit reduction, and hurts many areas of our agriculture economy"

Farming interest groups lambasted the bill. "The deal is blatantly anti-reform," the National Sustainable Agriculture Coalition wrote in an abrasive statement. "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 Senate passed a farm bill extension in June and but the House never voted on it or its own version, leading to the version passed last night. Congress will now have until the next fiscal year, which begins Oct. 1, to pass a more typical five-year extension.

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