One Hand Clapping for Last-Minute Milk Price Save

No quick spike in milk prices after all. The “fiscal cliff” package the House and Senate passed includes an extension of most, though not all provisions in the 2008 Farm Bill, including the dairy price support programs.

Many dairy farmers are unhappy in part because they want the programs replaced with a voluntary program that would insure participants a formula-based profit margin.

This was part of the new Farm Bill the Senate passed and also in the new Farm Bill that languished in the House — reportedly because House Speaker John Boehner couldn’t count enough votes for it.

Not all dairy farmers wish the new Farm Bill had become law, however. Some are fine with the existing programs, assuming positions their associations have taken are a reliable indicator.

The milk and food manufacturers are also relieved because the insurance program would have conditioned full payouts on production cuts — thus presumably driving up the prices they would have to pay.

So we’ve still got dairy subsidies, but their costs aren’t offset as they would have been in the revamped Farm Bill. Congress instead took the money out of SNAP (the food stamp program).

Benefits are intact, for the time being. The $110 million needed to protect dairy farmers from profit losses came out of the portion of SNAP that funds nutrition education programs. (Anyone else see the irony here?)

Would that this were the end of SNAP cut issues. But it won’t be.

The current benefits provisions might seem protected through the end of this fiscal year, since Congress extended them along with the dairy price supports.

But it will be looking for significant savings to replace the briefly-suspended across-the-board cuts.

Perhaps even larger savings — and all on the spending side — since Republicans say they won’t raise the debt ceiling unless the additional borrowing authority is matched, at least dollar for dollar, with spending cuts.

And they’ve got their eyes set on entitlements, e.g., programs that guarantee benefits to everyone who meets the eligibility criteria. Though their pronouncements often name Social Security and Medicare, SNAP falls into that category too.

Whether SNAP cuts become part of the next “fiscal cliff” deal remains to be seen. So does what happens when the extended provisions of the Farm Bill expire at the end of September — whether SNAP falls under the spending-cut knife before or not.

What we see already, however, is that the Farm Bill picks winners and losers — not only among dairy farmers, but within the agriculture industry as a whole.

We consumers win and lose also — mostly the latter, I think.

In the narrowest sense, we were winners in the last-minute milk price fix, since without it, milk prices could have more than doubled.

In the larger sense, however, we’re losers because we pay for the dairy subsidies twice over — both with our taxpayer dollars and in the prices we pay at the grocery store, though the latter are also jacked up by other price-manipulating mechanisms.

Maybe not a big deal for those of us who can afford a bit extra for milk, yogurt, cheese and a variety of other processed foods, e.g., bread, soups, lunch meats.

But for SNAP recipients trying to get along on a per-person average of about $4.46 a day, those extra pennies make a difference.

Learning how to eat healthfully on the cheap too, but Congress picked them as losers on that.

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One Response to One Hand Clapping for Last-Minute Milk Price Save

  1. […] $274 million cut would come on top of a $110 million cut Congress made in January — this to offset the costs of averting a milk price spike that would […]

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