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The Path to a Better Farm Bill

Wednesday, July 10, 2013

 

 

 

The following blog appeared on The Hill's Congress's Blog on July, 10, 2013.

 

House leaders got a lot of grief for the failure of the farm bill. And, now they are getting a lot of grief for proposing to divide the bill into two bills.

But the sad fact of the matter is that the better farm bill House leaders really want is also one that probably would have passed the House in the first place and still could. That’s because a better farm bill would cut farm subsidies far more deeply than the cynical bill produced by the House Agriculture Committee and would have attracted more support in the Republican caucus.

Though House leaders pledged to vote for the bill produced by the committee this year, they couldn’t have been very happy about it. That bill plows most of the savings from eliminating widely discredited “direct payments” into new price and revenue guarantees and crop insurance subsidies. No wonder 62 Republicans voted against it.

A better bill would have pocketed the $40 billion in savings from ending direct payments – which have been paid regardless of need and whether or not a farmer actually grows a crop – and kept right on cutting.
 

In particular, a better bill would put real limits on crop insurance subsidies.

Because there are no limits, some farmers currently receive more than $1 million a year in premium subsidies, while the bottom 80 percent get only about $5,000 each. In combination, means testing and payment limits would have saved more than $5 billion over 10 years.  Trimming the subsidies paid to insurance companies that sell the policies would have saved another $5 billion over 10 years.

What’s more, a better farm bill certainly would not have increased subsidies to farm businesses – especially at time when farmers are enjoying record profits.

And, a better bill absolutely would not increase price guarantees for major crops such as corn or provided expensive new crop insurance programs for cotton. Stripping away new price guarantees and crop insurance giveaways would have saved another $30 billion over 10 years.

Combined with other reforms, a better bill would save another $40 billion – on top of the $40 billion already saved by (finally) ending direct payments.

Would that have been enough for the fiscal conservatives who voted against the bill?

Some say Agriculture Committee Ranking Member Colin Peterson (D-Minn.) didn’t deliver the votes two weeks ago, but no one should be surprised that a farm bill that kicks 2 million people off the Supplemental Nutrition Assistance Program (formerly food stamps) only got 24 Democratic votes.

By contrast, 62 Republicans voted against it.  And, what’s interesting is that 40 of the 62 Republicans who voted against final passage had earlier voted in favor of a package of crop insurance reform amendments that was only defeated through some last-minute arm-twisting.

In the weeks before floor action, my colleagues at Environmental Working Group and I met with more than 300 Congressional offices, and many Republicans told us the reforms proposed by Rep. Ron Kind (D-Wis.) and Tom Petri (R-Wis.) didn’t go far enough.

Of course, the caterwauling from farm lobbyists would make it hard to pass a better farm bill. But, the truth is that farm businesses would still get a pretty sweet deal and farm lobbyists would not be facing political irrelevance.

Even if you eliminated direct payments, rejected higher price guarantees and jettisoned new crop insurance giveaways, farm businesses would still enjoy a government-financed “safety net” that would be the envy of any other industry in America. Farmers would still get billions in subsidies to buy government-backed revenue insurance and insurance companies would still get billions in subsidies to sell their policies.

There has never been a better time to rein in farm subsidies. Net farm income is forecast to top $128 billion in 2013, the most since 1973, and the average household income of large commercial farms tops $200,000. Every measure of farm wealth is off the charts.

Where do we go from here? It’s crazy to think the Democrats who refused to kick 2 million people off SNAP would be happy to kick just 1 million people off SNAP. And, dividing the bill into a “farm only” farm bill and a nutrition bill doesn’t address conservatives’ legitimate concerns about the cost of runaway subsidies. 

To pass a farm bill, the solution is simple: farm lobbyists need to stop demanding unlimited subsidies in a time of plenty and instead accept the common-sense reforms needed to push the farm bill across the finish line.

Scott Faber is the senior vice president for Government Affairs for Environmental Working Group, a national environmental health research and advocacy organization.