Antiquated Farm Policy Fiscally Foolish

Member Group : Jerry Shenk

In June, the Republican-controlled House of Representatives rejected, 195-234, a trillion-dollar farm bill that included agriculture provisions and food stamp funding. Local Reps. Charlie Dent and Jim Gerlach voted with the losers.

Relics of the 1930s and 1940s, market-disrupting row-crop and crop-insurance subsidies cost taxpayers billions annually. The general public receives little for huge government outlays for farmers other than tax obligations, government debt and higher food prices.

Three-quarters of government payments go to very large (including corporate) farm operations raising wheat, corn, soybeans, cotton and rice, slighting meat, vegetable and fruit producers whose products, nevertheless, reach markets. Most local farmers receive little or nothing, but we all pay higher prices for food.
Ryan Alexander of the watchdog organization Taxpayers For Common Sense recapped the failed bill:

"While the rest of the country has been in the economic doldrums … farm country has seen record profits. The House Agriculture Committee’s reaction to this scenario: layer on more agriculture subsidies that would put taxpayers on the hook for guaranteeing those record profits for years to come … by creating whole new subsidized income entitlement programs designed to guarantee up to 90 percent of a farmer’s revenue. It also resurrects … guaranteed target prices for favored crops. … some of the target prices are so high, they would have triggered immediate payouts.

"Taxpayers spent more than $14 billion on the crop insurance program last year, and this bill would have only made it worse by adding on new crop insurance subsidies for pennycress weeds, peanuts, sweet sorghum, sugar cane and other carve-outs."

OpenSecrets, an organization that tracks campaign money, reported that, in 2012, national politicians received $81.4 million from agribusiness interests, $60.7 million of it for Republicans whose members of Congress averaged more than $80,000 in campaign receipts.

So, what did the agriculture sector buy with that money?

House Republicans separated food-stamp funding from the defeated bill and passed an "agriculture-only bill" by a narrow vote of 216 to 208. This time Dent and Gerlach voted with the "winners." Twelve brave Republicans voted against the bill. No Democrats supported it.

Following defeat of the original bill, Indiana Republican Marlin Stutzman, a fourth generation farmer, said: "Eighty percent of the spending goes toward food stamps." He urged the House to "do our work in the full light of day by splitting this bill and having serious debates on both farm and welfare policy."
Ignoring Stutzman, the ag-only bill bypassed a real policy debate and substantive farm policy reforms. To avoid the embarrassment of the earlier loss, reminiscent of the way Democrats passed Obamacare, Speaker John Boehner (R-Ohio) and the House leadership railroaded through a hastily-drafted, 600-plus-page bill in less than 24 hours following its appearance, while allowing no amendments.

Pot, meet kettle.

The House-passed bill contains indefensible subsidies to farmers, including sugar-producer programs, and creates new income-entitlement programs, such as the shallow-loss program.

What’s shallow loss? Currently, America’s crop insurance program helps farmers "buy" insurance covering poor yields and price declines by subsidizing nearly two-thirds of the premiums. Like many insurance plans, all revenue losses aren’t insured. The shallow-loss program would effectively guarantee farmers revenue by sending them money if their actual revenue falls, in some cases, by only 11 percent, a modest decline not usually covered by existing crop insurance.

The Heritage Foundation wrote:
"When the House leadership first announced it would separately consider the food stamp and farm components of the ‘farm’ bill, it looked like they got the message that current farm policy was in dire need of reform. … But now that separation has occurred, they’ve forgotten the very reason why separation was needed.

"Supporters of this farm-only … bill wasted the golden opportunity … to promote policies that benefit taxpayers, farmers, and consumers in a fiscally responsible way. With the passage of this bill, the House has gone even further to the left than the Senate."

Alexander, again:
"(GOP) Leadership argued this was the same … amended bill that failed last month. Except it wasn’t. Yes, they repealed archaic and wasteful permanent law that dated back to 1949. But … they had conveniently deleted nearly all the lines that would ‘sunset’ these new changes in 2018. So they not only created new income guarantee entitlements, revived Moscow-on-the-Potomac, government-set target prices, loaded up with new special interest carve-outs, and expanded already overly generous crop insurance subsidies, they made these market distorting subsidies the new ‘permanent law.’ … It’s waste on auto-pilot."
By passing the ag-only farm bill, House Republicans played directly into Democrat’s caricature of them: More interested in crop subsidies than aid to the poor; the GOP was unwilling to vote for a farm bill with food stamps included but happily supported the outrageous redistribution of taxpayer money to wealthy farmers and agri-businesses.

This time, it’s fair criticism.

If taxpayers and consumers can generate enough outrage over the ag-only farm bill and archaic farm policy in general, House Republicans like Dent and Gerlach may think twice the next time there’s a vote for farm subsidies or anything like them.