Farm Bill Fiasco, circa 1949
What is wrong with agriculture policy in the United States? Heritage’s Diane Katz explains with great clarity that farm policy, encompassed in the “farm bill” every five years, is outdated, anti-free-market, and bloated, chock full of things that simply should not be in a farm bill. In other words, it’s awful.
What’s worse (and related to the whole “outdated” thing), is the fact that every time the farm bill is about to expire, a chaotic flurry of fear and worry starts to emerge from lawmakers, agricultural economists, the big farm lobby, environmentalists and the media.
As we’ve explained, the sky doesn’t fall if a farm bill is allowed to expire. The only major, earth shattering event that occurs is certain big farmers have a period of uncertainty about how much taxpayer money they’re going to be handed, and that’s according to the non-partisan Congressional Research Service.
What many people fear is that once the farm bill expires, we will have to revert back to the 1949 permanent law. CQ (sub. req’d) explained that “ For decades, the threat that these older laws could go back into effect has guaranteed that lawmakers produce a new farm bill when the old one expires.”
Scott Brown, an agricultural economist at the University of Missouri Extension, said, “If you think you can take 1949 law and apply it in 2012 without some issues, then you haven’t thought very carefully about how agriculture has changed over the last several decades.”
Similarly, Rep. Bruce Braley (D-IA) said, “Going back to a 1949 farm bill would be disastrous for Iowa agriculture, family farmers, and American consumers. It would threaten farmers with old-fashioned government controls and outdated limits on modern practices.”
Senator Chuck Grassley (R-IA) said, “You just can’t have a 1949 farm bill that’s going to fit agriculture in the 21st century.”
Environmentalists also express their concerns. For example, Daniel Greig, executive director of the Berks County Conservation District, said that the farm bill makes grants available to help farmers buy equipment or build systems needed to meet federal environmental requirements.
Ironically, though, federal regulations are often the source of environmental problems. As Diane Katz explains, “Billions of dollars lavished on farmland conservation encourages over-planting that degrades the environment.”
One article cites the “tremendous differences” between the 1949 farm bill and the current farm bill. According to Dale Moore, a deputy executive director at the U.S. Farm Bureau in Washington:
Agriculture Secretary and former Gov. Tom Vilsack would gain the authority to set price controls, production limits, on farmers and even the prices that food processors pay for corn, soybeans and wheat, and in turn what consumers would pay at the supermarket. The prices would be set according to a parity formula indexed to prices for such commodities that date back 100 years. But production limits could also lead to a supply-and-demand scenario that raises prices.
The fact is, though, that current farm policy is structured similarly to the original farm policies of the 1930s and 1940s. We still have price controls. We still have production limits. We still have payment formulas. Consumers still pay more at the supermarket than they would have to if free-market principles were the guiding force behind prices, not legislative horse trading.
Farm subsidies include income support, price controls, operating and land ownership loans, insurance, and disaster relief. Eligibility and benefits vary by program and market conditions. But the underlying purpose is largely the same: to shift the costs of agricultural risk to taxpayers, either by augmenting farmers’ income or artificially inflating commodity prices.
All of this begs a couple of questions. First, why can intelligent people not see the connection between the old flawed policy and the flaws in current farm policy; and second, and of more immediate concern, if everyone hates and fears the 1949 permanent law so much, why is it still on the books?
You’ll be hard pressed to find anyone touting the benefits of the 1949 law.
One thing is certain: farm policy is ripe for reform, as Heritage experts have made very clear. And frankly, this objective is low-hanging fruit. Lawmakers simply need to develop policy that abides by free-market principles and lose their penchant for micromanagement of the American people.
Diane Katz characterizes current farm policy thusly:
The legislation does matter a great deal but principally because agriculture subsidies yield far more costs than benefits for the vast majority of Americans. Rather than stabilizing crop prices, subsidies promote overproduction and downward pressure on prices. Billions of dollars lavished on farmland conservation encourages over-planting that degrades the environment. Payments designed to save small family farms are largely pocketed by profitable agribusinesses.
Of course, changing all of this would take a dose of virtue many lawmakers have proven themselves not to possess – at least not yet.
As Katz notes:
None of which should be all that surprising considering that agriculture policy is largely intended to produce votes, not a reliable and affordable food supply.
Buried under all the rhetoric, there’s the truth. And that is that the farm bill that’s reauthorized every five years is not the solution, and neither is reverting back to 1949 law. Real reform is what’s needed.