FARM BILL SEPARATION MEANINGLESS WITHOUT REAL REFORM: CONGRESS MUST REFORM FARM PROGRAMS
Yesterday we noted that though the defeat of the farm bill was a decisive victory, the separation of $740 billion in food stamps from the nearly trillion-dollar farm bill would be yet another critical step. If that separation occurs, we’ll finally be accurate when we call the “farm bill” the “farm bill.” But this separation will be meaningless if it is not followed by real reform of the farm and food stamp programs.
Fortunately, Heritage has outlined 6 reforms Congress can put in place to improve farm policy.
Make no mistake, despite claims of reform the recently defeated House farm bill did not do nearly enough to remove the risk imposed on taxpayers or mitigate the harm done to taxpayers, consumers and small farms. The fundamental flaws of this outdated legislation remain.
The farm bill was riddled with bad policy, and conservative activists knew it and worked to defeat it. Even the House Agriculture Committee Chairman, Frank Lucas (R-OK), said that it was thanks to pressure from groups like Heritage Action and, more importantly, excellent activists that the so-called farm bill was defeated.
In May, Heritage laid out 6 principles to guide the farm bill; Congress failed to take their advice; this bill deserved to fail.
Central planning never works well; the agriculture industry is no exception. Farmers are sophisticated, innovative business leaders, evinced by their record high incomes. They don’t need subsidies upon subsidies. Really, they can take care of themselves:
There are several time-tested ways for farmers to manage risk without taxpayer subsidies, including futures contracts and hedging, crop diversification, credit reserves, and private insurance. There could be even more options if Washington loosened its grip on agriculture and allowed entrepreneurs to create new products and services for managing risk.
The farm bill costs taxpayers exorbitant amounts of money and does nothing to help small farms. Large corporate farms, the rich and famous, are the true beneficiaries. Heritage states:
About 75 percent of larger farms with incomes of $250,000 to $999,999 receive government subsidies. Only 24 percent of small farms with incomes from $10,000 to $249,999 get them.
Finally, consumers have been continually harmed by farm bill subsidies. Heritage explains:
Americans pay two to four times higher prices for sugar than consumers in other countries, on account of government-imposed tariffs on imports and quotas on domestic production. And consumers pay hundreds of millions of dollars more for milk, butter, cheese, and a variety of other dairy products because of government manipulation of supplies and prices.
To be clear, none of these realities were reflected in the farm bill the House produced; conservative principles were ignored.
Now Congress has the opportunity to get it right. Anything less than serious reform is unacceptable.
Only by taking the following steps can Congress begin to restore some sanity to our nation’s misguided and costly agriculture policy:
1. Separate Food Stamps from Farm Policy
2. Do Not Add New Programs
3. Do Not Add Costs to the Most Expensive Farm Program
4. Make Sensible Reforms to Crop Insurance and get us on a path to permanently winding down these subsidies
5. Do Not Artificially Drive Up Food Prices: Repeal the Dairy and Sugar Programs
6. Convert Food Stamps into a Work Activation Program
Heritage’s Daren Bakst explained the House farm bill in the following terms:
With its price supports, import quotas and supply restrictions, it’s an exercise in central economic planning. These sorts of policies were hip in 1933 — and have failed every year since. For Congress to repeat the mistakes of the past would be inexcusable. And, of course, no legislator who embraces this bill can claim to be for free markets and limited government — at least, not with a straight face.
Even a farmer, Britt Dudek of Dudek Orchards LLC, is disgusted with the farm bill, calling it a “multi-layer, complex, how-the-heck-did-we-get-here kind of system.” He said:
These regulations that the agencies write are so incomprehensible and make so little sense to anybody on the ground. They are not farmers. They are bureaucrats, and they are steered by Washington, D.C.
Farmers, taxpayers and consumers alike deserve better than this. Washington, you can leave the 1930s. Welcome to 2013.