While there’s still that pretty important fiscal cliff Congress is still trying to avoid careening over, it seems lawmakers have at least reached a compromise that will keep the country from the so-called “milk cliff.” The deal still has to be approved by both the Senate and the House, but if it works, we likely won’t be seeing $7 milk in the grocery aisle any time soon. Whew.

Both the Senate and House Agriculture committees announced their plan yesterday to extend the 2008 farm bill for a year, in order to figure out what lawmakers will do to figure out a long-term solution. The bill expired on Sept. 30, notes USA Today, but if things had been left there until 2013, a 1949 farm policy would’ve kicked into effect and likely caused a big surge in milk prices.

Under the expiring 2008 bill, certain dairy subsidies were in place that kept the prices paid by the government to dairy farmers at a certain level. If it hadn’t been replaced or extended, those prices would go back to where they were under the 1949 law — which were much higher and would’ve ended up inflating the price of milk to about double what they are now.

If the government has to pay more for milk, farmers would sell their dairy products at that high price to the government, but then the commercial market would suffer by having to also pay that price. Supermarkets would suffer from dairy shortages in all likelihood, causing consumer prices to skyrocket.

Both sides of the aisle in Congress seem to be doing a bit of fingerpointing but at least they’ve seemed to come to an agreement for the time being on the milk cliff, if not the fiscal one.

“The lack of action by the House Republican leadership has put us in a situation where we risk serious damage to our economy unless we pass a temporary extension,” said Sen. Debbie Stabenow, D-Mich., chairwoman of the Senate Agriculture Committee.

“If a new Farm Bill is not passed in the next few days, Agriculture Committee leaders in both chambers and both parties have developed a responsible short-term Farm Bill extension that not only stops milk prices from spiking, but also prevents eventual damage to our entire agriculture economy,” she said.

Things looked promising last summer when the Senate passed a new farm bill, but a similar bill hit a standstill in the House, slowing things way down. This extension is only that, however, an extension.

“It is not perfect — no compromise ever is — but it is my sincere hope that it will pass the House and Senate and be signed by the President by Jan. 1,” Frank Lucas, R-Okla., chairman of the House Agriculture Committee, said in a statement.

My morning bowl of cereal thanks you.

Agriculture leaders reach deal on farm bill extension [USA Today]

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