“Farm Bill” Question and Answer
How much does the so-called “farm bill”—the Federal Agriculture and Risk Management Act (H.R. 6083)—cost?
According to the Congressional Budget Office (CBO), the bill costs $957 billion over ten years. The last farm bill, enacted in 2008, cost $604 billion over ten years. This bill amounts to a 60% increase in farm and food aid since the last reauthorization.
Doesn’t H.R. 6083 “save” money?
Not in any real world sense. As stated, the bill includes policies that over ten years will cost 63% more than the previous authorization. It is only because the Congressional Budget Office must ignore the expiration date of these programs and assume their continuation into eternity—including the Obama food stamp expansions—that the bill can be judged to “save” $35 billion. This is really just Washington-speak for spending 3.5% less than expected ($957 billion instead of $992 billion)—it’s not a cut.
Isn’t H.R. 6083 really mislabeled as a farm bill given how much food stamp spending it includes?
Yes. 80% of H.R. 6083’s spending is comprised of food stamp spending. This is because there are now 46 million individuals on food stamps, compared with 30 million in 2008 and 17 million in 2000. The reduction in the rate of growth to the food stamp program contemplated by the bill equals just $16 billion or 2%—not the sort of reforms that will lead to rolling back the food stamp program. This is one reason why most conservatives are so intent on splitting up the bill between its food stamp and farm subsidy components.
Doesn’t H.R. 6083 include some much needed reforms to farm subsidies?
The bill does eliminate wasteful direct payments to farmers, but it then plows much of the “savings” back into three new “shallow loss” entitlement programs that will actually serve to guarantee the profits for a larger number of farmers than currently benefit from direct payments. In addition, the bill sets new price floors for commodities (in most cases, higher than average recent prices) and expands crop insurance subsidies.
Isn’t passing H.R. 6083 crucial towards passing drought assistance for those regions of the country that have been hard hit?
No. The House of Representatives has already passed a separate piece of legislation—the Agriculture Disaster Assistance Act, H.R. 6233—to provide $383 million in emergency assistance to farmers, ranchers, and orchardists. The Senate refuses to act on the measure in order to put artificial political pressure to pass a massive farm bill. We opposed this drought assistance (see below), but regardless of a Congressman’s support for such assistance, it should have no bearing on whether they support a separate, long-term farm bill. Note: Some congressional offices, in an effort to confuse the issues, have noted that there is no food stamp spending in this separate drought package. That is true, but it confirms that the future of the drought package is not tied to passage of a multi-year farm bill.
Should the federal government be providing $323 million in drought assistance?
No. Proponents of the bill cite the drought’s impact on livestock—and the absence of livestock-specific disaster programs—as the principle reason for the aid package. However, the livestock-specific disaster programs expired in 2011, meaning ranchers knew that they had to plan for possible disasters, including drought. The Washington Post explained that “farmers should have to hedge as other businesses do: by diversifying their product lines, purchasing insurance at market rates, leveraging assets or maintaining cash reserves.” Because livestock producers did not take preventative action, they are now clamoring for a bailout. The bill also goes well beyond drought-inflicted livestock losses, by offering “subsidies to ranchers for livestock killed by raptors and wolves (along with hurricanes, floods, blizzards, disease, and extreme cold).” It also includes wildfires. The “drought” bill also covers trees, defined as “a tree, bush, and vine”, impacted by late-season freezes and insect infestations.
Doesn’t the agricultural community need a farm bill during this recession?
No. U.S. agriculture is thriving. Net farm income hit a record $98 billion last year and is expected to reach $122.2 billion in 2012. The top five earnings years in the last three decades have all occurred since 2004. With a healthy agriculture sector and a spiraling federal debt, now is the time to reform and eliminate commodity subsidies that cost taxpayers and distort the market.