Milk prices are at stake in 5-year, $500 billion farm bill

WASHINGTON – The fight over renewing the nation's farm bill has centered on cuts to the $80 billion-a-year food stamp program. But there could be unintended consequences if no agreement is reached: higher milk prices.

Members of the House and Senate are scheduled to begin long-awaited negotiations on the five-year, roughly $500 billion bill this week. If they don't finish it, dairy supports could expire at the end of the year and send the price of a gallon of milk skyward.

There could be political ramifications, too. The House and Senate are far apart on the sensitive issue of how much money to cut from food stamps, and lawmakers are hoping to resolve that debate before election-year politics set in.

Minnesota Sen. Amy Klobuchar, a Democrat who is one of the negotiators, says the legislation could also be an opportunity for the two chambers to show they can get along. "This will really be a test of the House of whether they are willing to work with us," she said.

The farm bill, which sets policy for farm subsidies, the food stamps and other rural development projects, has crept through Congress in the last two years while lawmakers focused on higher-profile priorities. But farm-state lawmakers are appealing to their colleagues to do something Congress hasn't done much lately — pass a major piece of legislation.

The main challenge in getting the bill done will be the differences on food stamps, officially called the Supplemental Nutrition Assistance Program (SNAP). The House has passed legislation to cut around $4 billion annually, or around 5 percent, including changes in eligibility and work requirements. The Senate has proposed a cut of around a tenth of that amount, and Senate Democrats and Obama have strongly opposed any major changes to the program.

The cost of SNAP has more than doubled over the last five years as the economy struggled, and Republicans say it should be more focused on the neediest people. Democrats say it is working as it should, providing food to those in need when times are tough.

With deadlines looming, many farmers say they need more government certainty to make planting decisions. Most of the current law expired in September.

If Congress allows the dairy supports to expire, 1930s- and 40s-era farm law would kick in, as much as quadrupling the price that the government pays to purchase dairy products, driving up grocery store prices.