Why the Farm Bill is a Trillion-Dollar Legislative Disgrace
By Josh Withrow, Legislative Affairs Manager for FreedomWorks
Republicans claim to be the party of free markets and limited government, yet belie that claim every five years by overwhelmingly voting to support a new farm bill, filled with government interventions into agriculture and market-distorting subsidies. This week, the House is voting on its next “Five Year Plan,” a disasterpiece of corporate welfare, Soviet-style price controls, and entitlement spending.
Of course, the farm bill is sold to the American public as a lifeline for struggling American family farms. The idea of the small farm family, the ultimate symbol of hard work and self-dependence, tugs at the heartstrings of every conservative. Yet the farm bill has actually contributed to the demise of the small farmer by pouring money into wealthy farm corporations.
Indeed, the vast majority of the agricultural spending in the bill goes to farms with annual incomes above $250,000 per year. And because the farm bill’s money is paid out based upon the amount of acres and crops planted, the largest agribusinesses are able to use more of that money to further expand and cut smaller competitors out of the market.
More odious is the preferential treatment given to certain industries over others – a classic example of lobbyists compelling the government to pick winners and losers in the marketplace. Sugar, corn, rice, peanuts, cotton, soybeans, and dairy are only some of the crops whose producers have snared massively profitable sweetheart deals through the farm bill.
These special carve-outs distort agriculture markets, encouraging farmers to plant the crops that are government favored, instead of responding to the desires of consumers. If you’re wondering why beef is so expensive nowadays, it’s partially because farmers who used to grow feed corn are now growing corn to be used for ethanol – because the government pays them generously to do so. So feed corn, and the cattle that eat it, get more expensive.
Then there is the treatment of crop insurance, which is subsidized every which way. First, taxpayers pay nearly 60 percent of the premiums for catastrophic crop insurance coverage. This extremely generous subsidy encourages farmers to take out more extensive coverage than they would need, and also to plant on lands that are riskier because any losses are taken care of. Second, the insurance companies themselves also get paid a generous portion of what they have to pay out, further ensuring that farmers and insurance companies alike enjoy safe profits.
And if the current insurance subsidies aren’t generous enough, the Republican-led House is agreeing to add a brand new entitlement to the farm bill – shallow loss insurance. Instead of simply covering catastrophic losses, the shallow-loss program covers the difference when farm revenues fall below their five-year average. Farmers are currently experiencing their highest average revenues ever, and thanks to the shallow loss program they’ll keep on experiencing record profits after prices go back to normal.
Finally, and perhaps most importantly, most of the farm bill’s spending has literally nothing to do with farms and crops at all. Food stamps take up eighty percent of the farm bill’s cost, having expanded over seventy percent in just the past five years. The food stamp program, technically known as SNAP (the Supplemental Nutrition Assistance Program), is the second largest means-tested welfare program in the U.S., behind only Medicaid. Yet Republicans who want their farm subsidies to pass use food stamps as an $800 billion earmark to get Democrats to help pass the Farm Bill (and the Democrats are similarly happy to have Republicans vote to pass food stamps). It’s political logrolling at its finest – everyone gets their bloated welfare bill passed, and no one tries to reform either of them.
With all of the things that are wrong with this abomination of a bill, there is no way any fiscal conservative should ever vote for it.
You can take action by calling your Representative and telling him or her to oppose this trillion-dollar legislative disgrace HERE.