Farm Bill Extension

The farm bill extension by Congress at the eleventh hour was a relief to many and a disappoint to some. Congress approved a fiscal cliff package that includes a one year extension of most of the agricultural policies that were in effect under the 2008 farm bill, with a few exceptions. The Supplemental Revenue Assistance Payments Program was not renewed, though the agreement reauthorizes direct payments for 2013 crops. Also, while the approved fiscal cliff package extends the already existing dairy product price support system and the Milk Income Loss Contract Program, it does not include the Dairy Security Act’s market based reform provisions, which were supported by the National Milk Producers Federation. The larger fiscal cliff package does include a solution to the estate tax challenges being faced by farm families and small business owners, providing a tax rate of 40 percent on estates with a value greater than $5 million, or $10 million per couple, and is indexed to inflation. While the farm bill extension does avoid reverting back to outdated 1930s and 1940s agricultural law, which is what would have happened with no bill at all, it still leaves farmers and ranchers floating in a sea of uncertainty.