AGRIBUSINESS: Permanent Law Delays A “Cat And Mouse Game”

The first of the year has come and gone, and the apocalypse in the milk aisle never really happened.

Farm law that takes over without a new farm bill resurrects ag policy based on the turn of the last century. Back then, USDA was supposed to pay about four times as much than it does now to prop up a federally mandated farm price for dairy products. Put a pencil to it, and the end result is that milk prices could double.

Payments from USDA to raise the market price would cost taxpayers about $12 billion per year, according to the White House.

USDA says so long as there’s a farm bill by the middle of this month, there shouldn’t be a problem, but Director of the Center for Agricultural Law and Taxation Roger McEowen say’s there’s a little more to it than that.

“It’s kind of a cat and mouse game,” McEowen explains. “If Congress delays, then the Department of Agriculture is not doing what it needs to do to implement permanent law. So as this delays further, what you’ll see is perhaps it would take a month. . . to get the regulatory framework in place, but, most likely a lot longer than that, so you wouldn’t see an impact on dairy prices for some time.”

A mid-December report by the Congressional Research Service shows that even before January first, implementation of old farm law and reversion to it were not expected to occur simultaneously. The report cites administrative hurdles for U-SDA as the major obstacle.

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