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If Congress doesn’t cut a deal on the farm bill by Christmas, some economists predict consumers will feel it first when they buy milk, butter, cheese and ice cream. That’s because under 1949 law, the support prices for dairy are more than double recent market prices. Peterson predicts that would require the Agriculture Department to artificially raise the market price of dairy products through a massive government buying program — akin to the quantitative easing the Federal Reserve has used to prop up the prices of financial assets and stimulate the broader economy.
This might make producers happy in the short term, but it’s generally assumed in farm country that 1949 support prices are unrealistic, and therefore politically unsustainable.
Fallen off the radar
Over the intervening decades, the threat of 1949 permanent law has always produced a deal. But in the current stare-down over President Obama’s health care law and the government shutdown — and the threat of debt default — frustrated farmers wonder if they’ve fallen off the congressional agenda altogether.
“It seems like we’ve dropped down on the priority list underneath Syria, the debt ceiling and those kinds of things,” said Doug Peterson, president of the Minnesota Farmers Union. “It’s been can-kicking, it’s been ignoring … We’re one of the biggest pieces of the economy in Minnesota and the Midwest. Should we receive some priority? I think so.”
After seeing the farm bill implode in the House earlier this year in a partisan battle over food stamps, Peterson and Klobuchar say there’s no assurance Congress will arrive at a new farm bill, or even a stopgap one- or two-year extension.
The only alternative, they say, is farming like it’s 1949.
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