Farm Bill Reform: Waiting on Rain During a Drought | Citizens Against Government Waste

Farm Bill Reform: Waiting on Rain During a Drought

The WasteWatcher

The 112th Congress made progress toward enacting a new Farm Bill, but eventually settled on a one-year extension.  In the 113th Congress, the House and Senate passed their own versions of the Farm Bill, but unfortunately for taxpayers, the bills are still rife with profligate subsidies and outdated programs.

Attempts to reconcile the House and Senate versions of the Farm Bill have thus far been unsuccessful.  According to a December 1, 2013 article in the National Journal, “The week before Thanksgiving the four principal negotiators—House Agriculture Committee Chairman Frank Lucas, R-Okla., and ranking member Collin Peterson, D-Minn.; and Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., and ranking member Thad Cochran, R-Miss.—failed to meet their own self-imposed deadline of reaching a framework for a conference report before taking a break for the holidays.”  Although there had been reports that negotiations between the Senate and House were progressing, major differences still exist between the two bills, and the four principal negotiators recently admitted that they will not finish their work before Congress adjourns for the year.

Approximately 80 percent of the Farm Bill is dedicated to policies surrounding the Supplemental Nutrition Assistance Program (SNAP), more commonly known as Food Stamps.  Unsurprisingly, this is where the main area of disagreement exists between the House and Senate versions of the bill.  The Senate bill would reduce SNAP funding by $4 billion over the next decade, while the House bill would save $40 billion in SNAP cuts over the same time period.  As Bill Christian, CAGW’s director of government affairs, wrote on July 9, 2013, “While few decry the need of a legitimate food safety net, many more are concerned about the explosion of dependency on the once-stigmatized program: according to an item that appeared in the Daily Caller on June 18th, 2013, the cost of food stamps has quadrupled in the last decade, from about $20 billion to $80 billion.”  The rapid growth of SNAP benefits demonstrates that the amount cut in the Senate bill is simply insufficient.

With regard to the agriculture title of the Farm Bill, neither the House nor Senate versions introduce real reform or repeal profligate subsidy programs.  Both bills expand crop insurance subsidies, leave intact the market-distorting sugar and dairy programs, and fail to repeal the corporate-welfare stalwart, Market Access Program.  According to Vincent Smith, professor of economics in the Department of Agricultural Economics and Economics at Montana State University and visiting scholar for the American Enterprise Institute, the failure to reform these programs could result in the House bill increasing total federal spending on farm subsidies by $10 billion per year relative to current law, while the Senate bill could increase farm subsidies by $5 billion per year.

On a positive note, both the House and Senate versions of the Farm Bill would repeal the direct payments program, which delivers $5 billion annually to farms based on historical production totals, $1.3 billion of which goes to farmers living on what once was farmland, but who do not farm.  That massive giveaway has rightly come under fire in recent years from lawmakers and policy groups on both ends of the political spectrum.

In a classic “one step forward, two steps back” fashion, both the House and Senate bills replace direct payments with the more wasteful shallow-loss program.  This program would provide payments to farmers when revenues fall below 85 percent of recent average prices in House bill, and 88 percent in the Senate bill.  Since crop prices are near historic highs, this so-called “reform” program could prove to be even more costly than direct payments. According to a June 17, 2013 article from U.S. News and World Report, “If crop prices shift towards longer-run historical levels, taxpayers could face an estimated $16 to $20 billion in new farm subsidy costs.”

The energy title of the House bill also leaves a lot to be desired, but by eliminating mandatory spending and reauthorizing programs at reduced discretionary funding levels, it is certainly better than the Senate alternative.  Over its five-year reauthorization period, the Senate bill contains a total of $880 million in new mandatory spending and authorizes $1.140 billion in appropriations for various Title IX (energy title) programs.  The House version contains no mandatory funding for Title IX programs, while authorizing $1.405 billion over five years, subject to annual appropriations. It repeals mandatory spending authority on rural and energy projects, whereas the Senate bill provides nearly $800 million in mandatory funding.

After last year’s failed effort to reform America’s outdated agriculture policies, the 2013 Farm Bill should have made more progress in reforming agriculture programs and food stamps. Unfortunately, with a packed legislative agenda and minimal time left before the end of the 1st Session of the 113th Congress, it seems highly unlikely that lawmakers will enact the substantive reforms to the Farm Bill that taxpayers need and deserve.

  -- P.J. Austin

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