There are still some folks in Washington doing painstaking investigative journalism. Two Bloomberg reporters uncover what the farm bill has truly become over the decades and why it should be heavily reformed:
A Depression-era program intended to save American farmers from ruin has grown into a 21st-century crutch enabling affluent growers and financial institutions to thrive at taxpayer expense.
Federal crop insurance encourages farmers to gamble on risky plantings in a program that has been marred by fraud and that illustrates why government spending is so difficult to control.
The article notes that last year alone, the U.S. Department of Agriculture spent about $14 billion insuring farmers against the loss of crops or income. Costly crop insurance is just one of many flaws in farm policy that need to change. It’s time for America to stop subsidizing wealthy farmers. And trust us, they’rewealthy:
Taxpayers are helping farmers pay their bills even as farm income this year is expected to top $120 billion, its highest inflation-adjusted mark since 1973, according to the USDA’s Economic Research Service. Farm income has doubled over the past four years thanks to rising land values and surging exports.
AgriNews reports Agriculture Secretary Tom Vilsack said “the U.S. will cease paying a $147 million annual settlement to Brazil that is part of a long-running dispute over cotton subsidies.”
After eight years of challenges and appeals at the World Trade Organization, the U.S. agreed to pay Brazil $147.3 million in damages to keep the South American country from raising tariffs on American goods. Brazil, a cotton powerhouse, was protesting the damaging effects of various U.S. agricultural policies, such as countercyclical payments made to U.S. cotton farmers when the price of cotton drops below a pre-established mark.
So taxpayers subsidize the U.S. cotton industry and, in turn, funnel money to Brazil’s cotton industry. Brilliant!
Anyway, if the settlement payments cease, Vilsack suggests Brazil may retaliate.
According to a recent report by U.S. News and World Report, farmers and cattle ranchers are a lot more independent than Congress would have you believe. Don’t get me wrong. There are plenty of farmers who gladly except taxpayer funded handout when Washington offers them.
But some farmers’ remarks indicate that they really just don’t need this help. For example:
“I think most of us are moving on with the thought that Congress is not going to be our savior,” says Leon LaSalle, a Montana rancher. “As ranchers, we take heavy blows and then put our boots on when the sun comes up and go back out.”
Congress does not need to coddle farmers. There are many different ways farmers and ranchers can manage risk – from futures contracts and hedging, crop and other enterprise diversification, liquid credit reserves, to private insurance – to prepare for bad weather and disasters themselves, without the help of their fellow taxpayers.
It would be nice if that were the title of an Onion article. Sadly, the federal government has given millions of dollars to dead farmers. The only question is: will they stop?
The Heritage Foundation’s Diane Katz suggests they stop, though this is just one of a myriad of reforms she and Heritage have suggested.
The waste is egregious:
Between 2008 and 2012, we now know, the U.S. Department of Agriculture (USDA) disbursed more than $36 million to some 6,300 farmers who had bought the farm (so to speak). The improper payments were revealed in a recent report by the Government Accountability Office (GAO).
Katz explains that the USDA’s Farm Service Agency (FSA) finally began keeping slightly better track of deceased farmers in 2007 and has recouped about $1 million out of a total of $3.3 million in improper payments for fiscal years 2011 and 2012.
The implosion of the House food stamp and farm bill on the floor was an unprecedented victory for conservatives and taxpayers alike. Nevertheless, some are lamenting the bill’s defeat as a sign that Congress has lost its ability to “negotiate.” As recounted in the National Journal:
“Everybody was going to have a part” of the bill, Combest recalled. “You’ve got the parameters that are established and you end up somewhere in the center.”
The farm bill, Daschle added, was classic legislative construction: The bill was crafted to give members in each state the buy-in they needed to vote for the final product. “If their state has no stake in the bill, the only way you get them is by getting them invested in the bill,” Daschle said. “You’ve got to figure out a way to make this relevant to them.”
In other words, the farm bill has always been about buying people off and getting them to implement bad policy. If Congress has indeed lost its ability to do that, this should be welcome news to just about everyone.
Sadly, we know this is not the case.