sheep farm bill

House “Farm” Bill: A Central Planner’s Paradise, Astronomical Costs for Taxpayers

The House is now considering a 629-page extension of the trillion-dollar food stamp and farm bill, and like Obamacare, it’s a central planners dream.  Through a combination of new farm subsidy programs, an expanded and costly crop insurance program, income protections for certain farmers, and the “shallow” loss program, this bill puts taxpayers at a major risk.

All of these fancy policy terms boil down to one idea: government control and manipulation.

With the “farm” bill, the federal government imposes its will on the agriculture industry at great expense to taxpayers – and when we say great, we mean nearly $1 trillion, more than $750 billion of which is for food stamps.

Of course, manipulation can be a two way street.  Big farm lobbies, particularly the corn and soybeans lobbies, have Congress wrapped around their little finger.  They are so influential that the House bill would ensure “farmers have virtually no risk.”

Pretty nice deal for them, eh?

But it’s not a nice deal for taxpayers, as Heritage explains:

Many of the cost assumptions for the new programs are based on commodity prices staying at or near record highs. If these prices come down to their long-term averages, the costs to taxpayers could be astronomical.

The Congressional Budget Office (CBO) estimates the Senate’s ARC program would cost $23.7 billion from 2014 to 2023.  A separate analysis by the American Enterprise Institute estimates the total cost could be nearly $60 billion over that same time period.

Heritage adds:

If Congress truly wanted to help farmers, it would abolish all central-planning policies. This would free farmers from contradictory subsidy programs that tie their hands and limit their ability to use their land as they deem fit. Farmers, consumers, and taxpayers would reap the benefits.

The Environmental Working Group has also produced an analysis demonstrating that the House’s “Price Loss Coverage” (PLC) program is “essentially a far more generous version of the program the bill repeals.”

EWG explains the PLC program replaces three subsidy programs: direct payments, counter-cyclical payments and the average crop revenue election.  But rather than reducing costs, the PLC program would “increase the probability of large government outlaws that would erase predicted savings.”  It could “potentially distort producers’ decisions of which crops to plant and how many acres of each.”  And it could “threaten trade agreements that have helped U.S. growers expand their exports.”

Why does Congress keep reverting to Depression-era subsidies for the wealthiest farmers at taxpayer expense?  Apart from the sway of big lobbies, some suggest that it’s a matter of habit:

Since the Great Depression of the 1930s, when there were plausible reasons to aid farmers, government has consistently accorded agriculture special treatment. The politics of doing so long ago became self-perpetuating. Without the massive subsidies, the Agriculture Department would be far less important. So would the congressional agriculture committees and the crowd of farm groups (sometimes, it seems, one for almost every crop) that lobby for benefits. And certainly the farmers who receive payments and protections feel entitled to them.

All this creates a powerful and shared vested interest in safeguarding the status quo, even as different interest groups and their congressional champions fight ferociously over the structure and distribution of benefits. 

 

One thing is certain: we, the taxpayers, cannot wait until New Years for Congress to break this bad habit.  Good, conservative lawmakers and activists should do everything in their power to ensure this food stamp and farm bill wilts in the summer heat.

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