Farm Bill Uncertainty Could Affect Food/Dairy Prices
With the U.S. government reopened and a budget crisis averted for now, Congress has shifted it's attention towards the Farm Bill.
The multi-year legislation governs agriculture programs and ranges from regulating food prices and rural development to conservation and nutrition assistance. The bill has caused contention among members over spending cuts, and the past shutdown has only slowed discussion.
Kentucky Farm Bureau Director of National Affairs Joe Cain said if Congress doesn’t reauthorize crop insurance provisions by the January 1st deadline, it would cause uncertainty for farming lenders and could result in a rise in food prices.
“As farmers go to plan for next year’s crops, just not knowing what’s out there to provide that safety net will impact some of the decisions that lenders may have," said Cain. "So, that uncertainty can have a big role in the Ag community.”
Cain said the first thing consumers would notice is a spike in milk and dairy prices as the country reverts to set food support prices under a law from the 1930s.
Cain said the debate between the House and the Senate is currently centered on cuts to the $189 billion nutrition assistance program -- or food stamps, which took up about 80% of the 2008 Farm Bill budget.