Farm Bill: Time to Make ‘Permanent’ Law A Bad Memory
The permanent legislation is totally unworkable, and it is ridiculous that Congress has not repealed it. — Robert Thompson, University of Illinois professor emeritus of agricultural policy
[R]everting to permanent law would re-introduce a radically different farm program, one with much higher support prices (through nonrecourse loans instead of payments) that would require much smaller crop production and much higher consumer prices… [Permanent law] is widely considered so extremely anachronistic as to be unworkable. — National Sustainable Agriculture Coalition
Yet, year-after-year, lawmakers insist on passing nearly trillion-dollar food and farm welfare bills to avoid the archaic underlying series of laws known as “permanent law.” As Heritage explained more than a decade ago, “The failure to repeal permanent farm law provides a strategic advantage for those who support a return to traditional subsidy and supply-control programs.”
That assessment is shared by the Congressional Research Service, which recently wrote, “The existence of permanent law thus likely forces Congress to take action, because inaction generally is considered to have unacceptable consequences — that is, reverting to a policy that almost everyone would regret.”
Fortunately, there are some in Washington looking to end this madness.
Senator John McCain (R-AZ) has filed an amendment to the Senate food and farm welfare bill that would repeal underlying “permanent law,” thus removing the threat of reversion altogether. Whether or not Senator Harry Reid (D-NV) allows a vote on the amendment remains to be seen. Nevertheless, it’s important to understand precisely what these laws—collectively known as “permanent law” — actually entail.
Permanent law is comprised of a series of central-planning mechanisms from 1938 and 1949 that are characterized by production limitations, market quotas, and expensive price supports tied to parity prices. These parity prices would essentially give a unit of a particular commodity (such as cotton, corn, or wheat) the same purchasing power it had back in 1910-1914!
Dislike of permanent law is universal, for Democrats and Republicans alike; everyone knows it should no longer exist. On October 1, 2012, the Senate Committee on Agriculture, Nutrition, and Forestry stated:
The 2008 Farm Bill will expire on Sept. 30 and agriculture policy will begin to revert to “permanent law” – a patchwork of outdated subsidies and costly price controls set in the 1940s.
Similarly, Sen. Debbie Stabenow (D-MI), the Chairwoman of this committee stated:
In the next few months, we transition to permanent law, a collection of policies from the 1930s and 1940s that are ill-suited to the way farmers work today.
Frank Lucas, chairman of the House Agriculture Committee, was also concerned about reverting to permanent law:
We are exploring all options to prevent the 1949 farm bill from taking effect, especially as it relates to dairy policy. Implementation of permanent law will take a considerable amount of time, and to that end, I call on (the USDA Secretary) to carefully consider all relevant factors and to take public comment through a rule making process before proceeding.
In December of 2012, USDA Secretary Tom Vilsack said:
The worst outcome would be for us to continue to see Congress do nothing, and for permanent law to come into effect.
The reason for the widespread dismissal of permanent law is clear: even attempting to revert back to such policies would subject both taxpayers and consumers to tremendous uncertainty. Last year, no one seriously thought the Department of Agriculture would take the necessary steps to implement permanent law.
As the debate on the farm bill continues in the Senate, with the potential to be taken up in the House next month, any and all efforts made to strip away bad underlying policies must be taken. This includes separating out food stamps and eliminating the Depression-era, Soviet-style laws so often used as a means of coercing lawmakers into authorizing bad legislation—legislation that ladens taxpayers with costly, market-distorting subsidies and the burden of paying for a food stamp program that has exploded to nearly $80 billion a year.