A gallon of milk could cost between $6 and $8 within days of a failed attempt to reach agreement over the fiscal cliff.
Unless agreement is reached before next Tuesday, a 1949 subsidy requiring the Agriculture Department to buy milk at inflated prices will kick in, reports The Washington Post
And that means that price of milk — currently around $3.65 a gallon — could double.
The Post says going back to the high subsidy was introduced as “a poison pill” to try to persuade Congress to pass the Farm Bill, which, though not strictly part of the fiscal cliff negotiations is being considered at the same time.
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Even dairy farmers aren’t happy about the idea of milk prices soaring. “It would be short-term euphoria followed by a long hangover that would be difficult for us to recover from,” Dean Norton, who farms in upstate New York told The New York Times.
Montana State University Professor Vincent Smith told the Times that the law is “antiquated” and has no relation to current agricultural practices.
“Letting it go into effect for even a few months would be particularly disastrous for consumers and food processors.”
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