The fiscal cliff fix passed by the Senate in the wee hours of the new year Tuesday morning also includes a dairy cliff fix crucial to Vermont dairy farmers, secured during intense negotiations by Senator Patrick Leahy. The package also extends the farm bill through the end of this September.
The Senate-passed bill will continue the MILC safety net program, including crucial "feed cost adjuster" formulas insisted on by Leahy that are vital in helping dairy farmers cope with high feed and production costs that have been worsened by drought. Leahy (D-Vt.) is President Pro Tem of the Senate and the most senior member of the Senate Committee on Agriculture, Nutrition, and Forestry.
Without the farm bill extension, permanent law dating back to 1949 would take effect in the new year, roiling the marketplace, imposing further uncertainty on farmers and driving up consumer prices for dairy products.
The extension package only delays the need to pass a 5-year farm bill, as Congress has done without fail for nearly 40 years. Leahy and others will continue to push for the new Dairy Security Act that is in the farm bill passed by the Senate last year. A counterpart bill was approved by the House Agriculture Committee, but House leaders refused to bring the bill to the floor.
Leahy said, "The new Senate should take up the farm bill that was passed last year in a strong bipartisan vote. But most importantly, House leaders need to allow a farm bill to be debated and brought to a vote."
As the Senate package was assembled this week it seemed that the fix to the feed cost adjuster and payment rate for the MILC extension would be too difficult to make it into the delicate agreement. But Leahy pressed through the night Monday in a series of intense negotiations on and off the Senate floor. In the end, the MILC program at $7.35 and a 45 percent rate was included, continuing the pre-August 2012 rate until August 2013.
The House still needs to act on the package, and that may happen as early as Wednesday.
The formula added by Leahy returns the trigger for the feed cost adjuster back to $7.35 from the $9.50 level to which it would have been pegged without his provisions, and it puts the payment rate back to 45 percent, up from 35. Without this change the MILC program would not actually have been triggered to help dairy farmers during this extension of the farm bill.
"Extending the MILC program without a realistic trigger formula would have amounted to an empty promise to farmers who need this help," Leahy said.
The MILC program paid Vermont farmers more than $11 million in 2012, but no payments were made in September or later, when the feed cost adjuster formula expired.