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Expired farm bill yanks milk insurance payments from dairy farmers

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Because legislators in Congress allowed the 2008 Farm Bill to expire Sunday, dairy farmers will now see up to 10 percent of their monthly income for milk lost, starting in October.

The Milk Income Loss Contract program — a safety net providing insurance payments when national milk prices drop — expired along with the Farm Bill Sunday. Though some politicians say in the national media that the lack of a bill won’t cause any harm, dairy farmers here disagree.

“This is going to hit farmers really hard in the north country,” said Michael B. Kiechle, president of the Jefferson County Farm Bureau. “Dairy is one of the few commodities that will get hit immediately by this because we’re on a monthly schedule. And we probably won’t get anything now until the crops go in the ground next spring.”

Sources say Congress will likely pass an extension of the current Farm Bill during the lame duck session after the election.

Meanwhile, farmers are feeling the pain due to high feed costs and low milk prices. The average dairy farmer here received $18.30 for 100 gallons of milk in August — $5.20 less than a year ago, according to the New York Farm Bureau.

Mr. Kiechle received a MILC payment in July of $1.69 cents per hundredweight of milk, when the milk price was $16.50 per hundredweight.

“The payment was 10 percent of my income,” said the dairy farmer, who owns a 400-acre dairy farm with 120 head of cattle in the town of Philadelphia. In total, his MILC payment for 250,000 pounds of milk was $4,225.

Many have blamed the thwarted attempt to pass a 2012 farm bill on election politics. Most of the frustration has been aimed at House Speaker John A. Boehner, who refused to let the House version of the bill move to the floor despite bipartisan support. The Senate passed its version in June and the House Agriculture Committee approved its legislation the next month.

Mr. Kiechle said most farmers are frustrated by the inaction of politicians who seem to only care about election results.

“If I had to sum it up, most farmers are saying it’s just Washington inaction again,” Mr. Kiechle said.

If politicians continue their political bickering this fall, U.S. farm policy faces an even greater upheaval if nothing is done by Jan. 1. If a new farm bill isn’t enacted or the current bill isn’t continued, commodity programs in the bill will revert back to a permanent law in the 1949 farm bill.

The unusual policy is designed to spur Congress to get to work, said Steve Ammerman, manager of public affairs for the farm bureau.

Because it’s a radically different system, reverting back to the 1949 farm bill could be a catastrophe for farmers and consumers. Government supported prices for milk would be four times as high and market prices for milk sold in grocery stores could double, according to the National Sustainable Agriculture Coalition.

“It would be foolish for that to happen, because it would cost the federal government so much money,” Mr. Ammerman said. “And consumers aren’t going to be paying $6 for a gallon of milk.”

Funding for the two largest programs in the farm bill — the Supplemental Nutrition Assistance Program and federal crop insurance — will be available through March 13 because Congress passed a continuing resolution to extend them. Available funding for a slew of other programs, though, will be on the backburner until a farm bill is in place. Those programs mainly include funding for commodity crop subsidies and conservation assistance, according to the agriculture coalition.

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