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The Ag Lobby Goes for the Gold

Thursday, October 6, 2011

As the Congressional Super Committee looks for cuts, industrial agriculture lobbyists fight to keep their wasteful piece of the budget pie.

Here in Washington, the so-called “Super Committee” on deficit reduction is continuing to scour the federal budget in search of $1.5 trillion in cuts over the next 10 years. The House and Senate committees that normally draft legislation authorizing federal programs and agencies have a looming deadline of October 14 to make recommendations on what could be cut. The stressful process has left lobbyists and advocates scrambling to save their pet programs and funding streams from the budget ax, or at least minimize the damage.

The mood that pervades many of these harried outside negotiators is apprehension or outright dread, particularly among those who do not have the heavy clout and deep pockets of big industries behind them. But even some of those usually favored interests have reason for concern – specifically health care and defense, which stand to lose billions if no Congressional deal is reached by the end of the year. It is no wonder, then, that those of us seeking to shield programs that feed the hungry, protect water and soil and have the least to offer corporate patrons feel very ill at ease.

Oddly, the industrial agriculture lobby has gone on the offensive, rolling out “deficit reduction” plans that potentially offer farmers a much more lucrative deal than they’re getting now.

The proposals from the National Corn Growers Association, American Soybean Association, and the National Cotton Council amount to bait-and-switch tactics.  Critics of farm subsidies, both from within Congress and from without, have focused their fire largely on the direct payment program that sends farmers and landowners a check every year regardless of current plantings, market conditions or economic need.  Direct payments are gifts from the taxpayer to rural landowners.  The more land a person owns, the more money he gets, every single year.

When you think that the definition of waste is spending money when you don’t have to, direct payments don’t make much sense.

That’s why everyone from President Obama to Senate Majority Leader Harry Reid, D-Nev., to various brave state farm groups (and yes, the Environmental Working Group) have suggested reducing or eliminating direct payments. The major crop groups can read the handwriting on the wall.  They’ve basically conceded the program ought to go.

However, they are striving to shift most or all of the money for direct payments into some other, less obviously unfair and wasteful program, not use it to pay down the deficit.

If there has ever been a farm program that hasn’t been co-opted by the largest agribusiness interests I’d like to hear about it.

This gambit perfectly illustrates the longstanding view of those in the agricultural community who believe they are entitled to public largesse: this is our money, and we should decide how to spend it. EWG’s response is, sorry, but this money belongs to the taxpayers.

The National Cotton Council calls its scheme the Stacked Income Protection Plan, or STAX. The plan relies on even greater subsidization of farmer premiums for revenue insurance, even though the government already pays an average of 60 percent of these premiums. It proposes to change the existing marketing loan program, which has been ruled illegal by the World Trade Organization, the better to cover the shallow losses not covered by most insurance plans.  In exchange for saying good-bye to direct payments, taxpayers would pay more for revenue insurance and for a generous loan program to ensure that cotton farmers never see a drop in income. That does seem like a stacked deck to me.

The plans proposed by the Soybean Association and Corn Growers would set a revenue guarantee for each participating farmer .  They want a new government program to supplement existing crop and revenue insurance., The guarantee would be based on the five-year rolling average income, meaning that for most crops the program would start out guaranteeing the record income levels of the last five years.   If a farmer’s revenue should fall back down to a more normal historical average, he or she could triple-dip by making decent money in the marketplace, collecting crop insurance and cashing in on the new revenue guarantee.

The audacity of these proposals would be breathtaking if they had come from any other industry. Can you imagine the oil and gas industry, which, like farmers, has seen record incomes over the last few years, coming to Congress and asking for a guaranteed revenue stream – paid for by taxpayers? Or the New York Yankees asking for money when attendance dips during a bad season? But the farm lobby not only asks for this unique revenue guarantee – it expects it as an entitlement.

The truth is, struggling farmers deserve some help in hard times, but that help should be targeted and limited since the national conversation right now is not about how much we want to spend, but how much we can afford to spend, and where do we get the biggest bang for the buck .

The American Farm Bureau Federation acknowledges farm programs must be cut and suggests that 30 percent of the cuts over the next 10 years should come from each of three areas --   traditional farm subsidies, primarily direct payments, conservation programs that help farmers and ranchers protect soil, water, and wildlife habitat and nutrition programs like food stamps (called the SNAP program).  The remaining10 percent should come from crop insurance subsidies that benefit private insurance companies.

While this deficit-reduction scheme may seem relatively equitable in terms of percentages, it is highly inequitable in terms of effects. Participation in SNAP has skyrocketed during the economic downturn.  This nutrition program remains the only thing standing between millions of children and chronic hunger and malnourishment.

Conservation programs are needed now more than ever to combat the market forces driving all-out production and complete disregard for the toll it is taking on land and water. We are at risk of erasing hard-won conservation gains achieved in recent decades and of undermining future generations’ ability to feed a growing population. Meanwhile, the large farms that benefit from farm subsidies don’t need these benefits because their profits are at an all time high, and crop insurance companies are making hefty returns thanks to taxpayer subsidies.  The “equitable” cuts called for by the American Farm Bureau Federation are anything but.

Members of the Joint Select Committee on Deficit Reduction, as well as the House and Senate Agriculture Committees, need to take a close look at Big Ag’s proposals and see them for what they are – a blatant attempt to hold onto cash in times of record farm income in spite of public sentiment and fiscal realities.

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