farm bill

It’s Time to Put the Farm Bill Out to Pasture

Some Americans may be surprised to learn that agriculture in their country is in large part based on a five-year plan. Most commonly referred to as the farm bill, it is up for renewal this year and—just like in years past—is likely to produce a legislative morass in which the primary beneficiaries are lobbyists and the business interests they serve. The following excerpt from a recent article in The New Yorker helps to illustrate the madness:

When milk prices bottomed out in the summer of 2016, Robin and David Fitch didn’t know how they could continue. Their four-hundred-and-seventy-acre dairy farm, in West Winfield, New York—a four-hour drive north of Manhattan—supported about a hundred and seventy milk cows. Sixteen years earlier, when they had married and started farming together, a herd that size would have been more than enough to keep them afloat. But milk prices kept falling that summer, eventually hitting fourteen dollars per hundredweight, down from twenty-five in 2014. The Fitches’ income took a nearly fifty-per-cent hit, while the debt they incurred from fuel costs, rising interest rates, and other expenses grew. The day came when they had to tell their two children that they might be forced to sell the farm. “My fourteen-year-old was in tears,” Robin recalled. “For the farmer, it means losing everything they have worked for their entire life—their land, their home, everything. It’s gone.”

The Fitches were not alone in their struggles. The U.S. Department of Agriculture estimates that, between 2013 and 2016, net farm income fell by half, the largest three-year drop since the Great Depression. Some forty-two thousand farms folded during the downturn, and small and medium-sized operations, such as the Fitches’, proved particularly vulnerable. Now, with commodity prices still low and farm debt predicted to reach record highs, the nonprofit organization Farm Aid has warned that, if the market doesn’t recover soon, the country could see its highest rate of farm closures since the nineteen-eighties. Newsweek estimates that, at the peak of that crisis, two hundred and fifty farms closed every hour.

Many American farmers are looking to Donald Trump for relief. He was, after all, their preferred candidate for President, winning sixty-two per cent of the rural vote in 2016. “Farmers built this country, and I was hopeful that he was going to see that and step up to the plate for us,” Robin Fitch told me. The President will soon have the chance to do just that, as Congress readies the next version of the farm bill, the single most important piece of legislation for the nation’s food growers. First conceived during the Depression, the bill has since become a fixture of American policy-making, updated and renewed and haggled over every five years or so. The 2018 bill, which is due in the coming months and is expected to cost around nine hundred billion dollars over a decade, promises to be one of the most consequential ever. This year, even more than in the past, farmers such as the Fitches face an existential question: Will Washington come to their rescue, or will it let them disappear?

The farm bill’s unassuming name fails to capture its effect on American life. Besides providing crop subsidies, establishing pricing structures, and regulating farming practices, it allocates funds for disaster relief, school-lunch programs, and wildlife conservation. Some eighty per cent of the bill’s budget goes to the Supplemental Nutrition Assistance Program (snap), formerly known as food stamps. “At one point, I started to catalogue the number of programs that were covered in the farm bill, and I gave up after a hundred,” Marion Nestle, a professor of nutrition, food studies, and public health at New York University, told me recently. “And every single one of those programs has a lobbying force behind it or it wouldn’t be there. And that’s just the farm programs!”

As the Fitches’ experience suggests, past farm bills have tended to benefit large operations over small and medium-size ones, which still account for ninety-seven per cent of all working farms in the United States. According to the Environmental Working Group, a D.C.-based nonprofit, the top ten per cent of wealthiest farms received seventy-seven per cent of commodity subsidies between 1995 and 2016. Roughly the same is true of crop insurance, currently the largest component of the farm bill behind snap. That’s where the real money is, Nestle told me. “What the insurance programs do is provide an incentive to grow as much food as you possibly can, because you know that the price is going to be guaranteed,” she said. The certainty of payment, backed by U.S. taxpayers, encourages big farms to get bigger, take risks, and then claim the insurance payouts if the crops fail to yield.

Each one of these paragraphs helps highlight at least one flaw with the farm bill or perceptions of the agriculture sector.

The Republican Food Stamp Plan is a Modest Step in the Right Direction

Republicans are expected to vote this week, possibly as early as today, on a proposal to cut the food stamp program by $39 billion over the next 10 years, while reforming the program to tighten eligibility and emphasize the importance of work. From the outcry among congressional Democrats and much of the media, you could be forgiven if you anticipated the outbreak of the Great Famine of 2013. In reality, the hysteria is just plain silly given how modest the Republican plan really is.

Time to End the Farmers’ Dole

Last week Washington enjoyed a miracle. Legislators failed in a high profile attempt to mulct the public.

Legislators were debating the Farm Bill, which mixes Food Stamps and agricultural price supports. Even though Washington is drowning in red ink, Republicans and Democrats wanted to approve a measure to spend nearly a trillion dollars over the next decade. 

Food Stamps and the House Farm Bill

Debate on the House Agriculture Committee’s version of the next farm bill will begin in the Republican-controlled chamber in June. One of the most contentious issues will be spending on the Supplemental Nutrition Assistance Program (SNAP, a.k.a, food stamps). The House Ag bill would cut SNAP spending by $20.5 billion over 10 years versus the Congressional Budget Office’s baseline. That’s too much for Democrats and it might be too little for conservative Republicans. 

Earlier in the week I wrote that the federal government should not administer or fund anti-poverty programs. Unfortunately, both Republicans and Democrats support big government so that isn’t an option. So let’s put the proposed cuts in food stamps in perspective.

The first chart shows the dramatic increase in inflation-adjusted SNAP spending since 2000. (See here for a quick background on what caused SNAP spending to more than triple since 2000).

 

The second chart shows the projected amount of spending under the House Ag bill versus the CBO’s baseline. Sum up the difference and you get the $20.5 billion over 10 years in cuts. On an annualized basis, it becomes clear that we’re hardly talking about major cuts to the food stamps program. Moreover, as the first chart shows, spending would remain near the elevated levels of recent years.

 

Food Stamps Growth Has Bipartisan Roots

Republicans are jumping on the news that participation in the food stamps program hit a new record of 46.7 million individuals in June (about one in seven Americans). In a sluggish economy, an increase in food stamps participation is to be expected. Thus, it’s fair to hold up the increase in food stamps usage as being emblematic of the Obama administration’s failed economic policies. In addition, the president’s 2009 “stimulus” bill increased benefits and eligibility.

Cheap Talk from a Fiscal Commissioner

The president’s fiscal reform commission started off with some breathtaking chutzpah from Senate Budget Committee Chairman Kent Conrad (D-ND):

Rising federal debt is like a tsunami that could swamp the country at any moment…Our economic strength and security is on the line. Now is the time to act. And we need everyone, Democrats and Republicans, working together on a solution.

Newsflash: Politicians Pander to Agriculture!

The American Soybean Association (ASA) recently asked each of the presidential candidates to respond to a series of questions about agricultural policy issues. The questions covered farm bill and crop insurance, estate tax, biodiesel, biotechnology, trade, research, regulations, and transportation and infrastructure. The candidates’ responses (full text here) were not exactly models of courageous and principled policymaking.

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