The WasteWatcher: The Staff Blog of Citizens Against Government Waste

In Other News.....The Farm Bill and The Terrible Twelve!

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


With the triad of scandals rocking Washington this week, you would be forgiven if you were unaware of the fact that we are heading into consideration of a five-year $940 billion Farm Bill, starting Monday.

CCAGW, along with ten other taxpayer watchdog and consumer groups, distributed a nice primer on the "Terrible Twelve" items currently contained in the behemoth that should be of serious concern:

"Washington’s Farm Policy is a nearly trillion dollar tangle of agriculture subsidies, welfare payments and environmental patronage.  There is tremendous need for reform.  Current subsidy programs are rooted in the 1930s, when prices for crops and livestock bottomed out and farm families were desperate for income.  Agriculture today could not be more different.  Farmers are pulling in record-high levels of income and carrying record-low levels of debt.  Technology has eliminated many of the risks that once plagued farming, and the profitability of crops that go without subsidies demonstrates independent agriculture is viable in the 21st Century.  There is no way to justify continuing to give tens of billions of dollars to the farm industry."

1. Direct Payments.  Taxpayers are lavishing billions of dollars on successful farm enterprises whether or not the farm is actually growing the crops for which they are receiving the subsidies or growing any crop at all.

2. Federal Crop Insurance.  In 2012 taxpayers spent more than $14 billion subsidizing agriculture businesses buying crop insurance (and thus subsidizing insurance companies) for everything from almonds to oysters.

3. Shallow Loss Programs.  A new open-ended income program will put taxpayers on the hook for guaranteeing record prices.  This shallow loss coverage would cost taxpayers billions of dollars and potentially violate World Trade Organization rules.

4. USDA Trade Promotion Programs. Taxpayers spend some $200 million annually to support advertising campaigns that benefit large corporate enterprises and agricultural special interests.

5. Sugar Program. A small number of sugar producers receive enormous benefits, while the costs are spread across the U.S. economy, harming consumers, taxpayers, and the sweetener-using industries.

6. Dairy Market Stabilization Plan (DMSP).  The DMSP would impose government controls and regulations on the nation’s milk supply, penalize farmers for exceeding government milk production "quotas," artificially inflate the price of dairy products for families and drive the cost of federal food programs higher.

7. Target Prices. Government-set price targets—about 40% higher than the previous farm bill and in many cases higher than record levels seen between 2005 and 2010—would expose taxpayers to billions in payments if crop prices dip slightly.

8. Rural Broadband. The Rural Utilities Service Broadband Loan Program is a classic example of waste and market distortion. In addition to the cost, in many areas, the practice of guaranteeing loans serves to undercut existing private-sector investment.

9. Mandatory Assessments. Mandatory assessments on farmers to promote commodities cost consumers and skirt constitutional provisions that only Congress has the power to tax. The program also violates basic principles of free speech, forcing some producers to pay to communicate messages against their will.

10. Cotton Program. Federal subsidies for domestic cotton are so high, they violate international trade rules. To keep Brazil from enacting retaliatory tariffs which would hurt American consumers, taxpayers send a $147.3 million check to the Brazilian Cotton Institute every year. Contact: James Valvo jvalvo at afphq.org

11. Ethanol. The Feedstock Flexibility Program is the definition of cronyism. With taxpayer dollars, the federal government buys up subsidized surplus sugar and sells it at a loss to ethanol makers.

12. Biomass. Since 2008, the Biomass Crop Assistance Program (BCAP) has proven to be a failure. Even though this wasteful, market-distorting program is replete with loopholes and is not currently funded, it would be revived by the draft farm bill."

On Direct Payments, the GAO has issued several scathing reports on the program, but here is the gist of their findings from a July 3, 2012 report :

"From 2003 through 2011, the U.S. Department of Agriculture (USDA) made more than $46 billion in direct payments to farmers and other producers. These producers planted varying percentages of acres that qualified for payments based on their historical planting yields and designated payment rates (qualifying acres).

“Cumulatively, USDA paid $10.6 billion—almost one-fourth of total direct payments made from 2003 through 2011—to producers who did not, in a given year, grow the crop associated with their qualifying acres, which they are allowed to do. About 2,300 farms (0.15 percent of farms receiving direct payments) reported all their land as “fallow,” and producers did not plant any crops on this land for each year for the last 5 years, from 2007 through 2011; in 2011, these producers received almost $3 million in direct payments."

 

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