A nine-month extension of the 2008 farm bill – tied to legislation allowing Congress to step away from the “fiscal cliff” – was secured following a late-hour House vote on Jan. 1. After the withering, partisan lead-up to the vote, few were popping champagne corks in the aftermath.

In the end, House GOP leaders allowed an up-or-down vote on the legislation passed earlier by the Senate, 89-8. The 257-167 House vote ended up with a majority of Republicans (151) voting nay along with 16 Democrats.

The legislation is expected to raise taxes by some $620 billion by increasing tax rates on incomes over $400,000 for individuals and $450,000 for couples. It will also provide a permanent 40 percent tax rate on estates worth more than $5 million ($10 million per couple).

“While much work remains on addressing the spending side of the ledger, the fiscal cliff package that was just approved injected a good dose of certainty into our nation’s tax policy,” said Bob Stallman, president of the American Farm Bureau Federation. “That is a major achievement. The measure restored the $5 million exemption level for the estate tax, which was in danger of falling to just $1 million. On the minus side, the top estate tax rate increased from 35 percent to 40 percent. Permanent capital gains tax provisions that retain lower rates was a positive point, as was the inclusion of enhanced expensing provisions for businesses.”

Even though a five-year farm bill wasn’t in the cards, farmers will be interested that the extension will maintain direct payments, which would have been otherwise axed.

“The provision extending the 2008 farm bill through the 2013 crop year is vitally important to rural America and to the nation's farmers and ranchers, including U.S. rice producers,” said the USA Rice Federation in a statement. “In particular, in the absence of a new farm bill, the continuation of the direct payment program and the market access and promotion programs are of critical importance to the rice industry.”

The legislation also alleviates concerns that dairy product prices will jump with a reversion to 1949 law. Many Capitol Hill observers claim lawmaker worries over a doubling in milk prices helped push Congress to act.

In mid-December, Jeffery Hall, associate director of national affairs for the Arkansas Farm Bureau, said, “No lawmaker wants to face constituents if dairy reverts to 1949 permanent law and the price of milk suddenly spikes to over $8 per gallon. That would cause major problems in a number of areas. And that’s why we adamantly oppose the elimination of permanent law. The fear of that is the only hook that we in agriculture have right now to get something done.”

It is no secret that dairy producers have been hurt by rising input costs and low milk prices in recent years.

Having backed the Dairy Security Act, hammered out over the last several years, as a solution to the problems, Jerry Kozak, President and CEO of the National Milk Producers Federation, lambasted the extension. “These stop-gap efforts don’t even qualify as kicking the can down the road. It’s little more than a New Year’s Day, hair-of-the-dog stab at temporarily putting off decisions that should have been made in 2012 about how to move farm policy forward, not offer more of the same. … Despite the progress made in 2012 on the farm bill, we’re starting 2013 on a bad note. We oppose any farm bill extension of any duration that does not contain the Dairy Security Act, and resolve to work this year on achieving that as a long-term goal.”