Taxpayers’ Bill for Farm Subsidies: $30 Billion by 2018
The savings to taxpayers from the so-called reform of federal farm subsidies are turning out to be mythical – while cuts to programs to help farmers protect the environment are all too real.
When the latest Farm Bill was passed – after fevered debate over subsidies that for decades have flowed disproportionately to the largest and richest farmers – the estimated cost from 2014 to 2018 for federal crop subsidy programs and marketing loans combined was $23.6 billion. But the latest estimates from the Food and Agriculture Policy Research Institute at the University of Missouri are that the total cost of the two programs for those years will be $29.9 billion.
The Institute’s U.S. Crop Program Fiscal Costs Report, released last week, said that the increase is driven by much greater than expected enrollment in the Agriculture Risk Coverage (ARC) program, which pays all farmers in a county if the county-wide revenue for a covered commodity falls below a predetermined level. Under the 2014 Farm Bill, farmers have to choose between signing up for ARC or the Price Loss Coverage (PLC) program, which makes payments if a covered crop’s average price during the year is below a predetermined reference price.
The two programs replaced the previous system of direct payments to all growers of covered crops and were supposed to save money. These new estimates show that these “reforms” will not save taxpayers money and were not really reforms at all – just more of the same.
Without marketing loans, the Institute estimates total ARC and PLC payments from 2014 through 2018 at $27 billion. The ARC program alone will cost $19.9 billion. USDA’s Farm Service Agency reports that farmers chose ARC for 76 percent of all crops on all acres, and almost all corn and soybean acres were enrolled in ARC.
The costs of these programs are ballooning at a time when major cuts are being made to conservation. The House Appropriations Committee just passed a bill that is incredibly destructive to a key program that helps farmers protect the environment.
The committee bill delays for yet another year full implementation of the Conservation Compliance Program established in 1985. This program is a quid pro quo between farmers and taxpayers: Farmers agree to take simple steps to protect soil and wetlands in return for generous farm and insurance subsidies.
The vast majority of farmers have been subject to these conservation requirements for a decade, and there is no good reason to once again delay their implementation while farmers who are depleting our soil and water continue to receive massive subsidies.