The Farm Bill in Brief

The 2014 Farm Bill is now only awaiting President Obama’s signature before becoming law.  By the numbers it looms at $956 billion.  The sticking points appear to be the cuts to SNAP (formerly known as food stamps) and the shift away from direct subsidy payments to subsidizing crop insurance.

The Committee on Catholic Rural Life (NCRLC) states their position on the bill here as “reluctant acceptance.”  The report makes no mention of the $8 billion in cuts to the food assistance program but does nicely recapitulate the reasons Sen. Stabenow’s (D-MI) claims that the bill achieves real reform might be dubious.

Since 1996 the federal government has paid direct subsidies to farmers tied only to the number of base acres they have – irregardless of profits/losses, acres planted or not planted, and the current price of crops.  This system, clearly, could have been improved.  Is the new program an improvement over direct subsidy payments?  David Dayen at the New Republic is more skeptical than the NCRLC.  The federal government subsidizes both ends of the insurance trade, “paying almost 2/3 of the farmer’s premium, as well as most of the insurance claims.”  With no caps on premium support, agricultural conglomerates can purchase large policies that when subsidized proportionally by the federal government leads to a disproportional distribution of federal wealth across rural America.  Here is Dayen more in-depth:

Referring to beneficiaries as “farmers” underplays how giant agribusinesses really benefit from subsidized crop insurance. There have traditionally been no limits to premium support, meaning the richest businesses reap the most benefits. A provision from Sen. Tom Coburn to reduce payouts for farmers with over $750,000 in income was stripped from the final bill, despite passing the Senate twice. The Environmental Working Group, a critic of crop insurance, estimates that 10,000 policyholders receive over $100,000 a year in subsidies annually, with some receiving over $1 million, while the bottom 80 percent of farmers, the mom-and-pop operations, collect only $5,000 annually. These are educated guesses, because under current law, the names of individual businesses receiving support are kept secret, a provision maintained in the new farm bill. The House version included a measure that would disclose which members of Congress receive subsidies, but that was dropped.

It’s hard to imagine a program that would ease the inequitable distribution of federal money without the Republican Tom Coburn’s provision, which has a way of disappearing from the final bills.

Finally, considering the amount of money cut from SNAP – at $8 billion – compared to the total amount of nutritional assistance in the bill – at $756 billion – the attempt at “reform” appears to be mainly symbolic.  However, one might ask whether symbolic victory that affects the ability of 850,000 American households to feed themselves is in accord with the principle of justice.

It is worth noting that the subsidies and the nutritional assistance programs overlap in terms of functionality – both serve to artificially prop up the agricultural industry.  The first artificially covers the cost of risk which would otherwise make agribusiness unprofitable in the United States.  The other artificially props up demand by covering the cost of food that low income families in the United States would otherwise struggle to afford.

The New York Times focuses mainly on the cuts to SNAP here.

The Wall Street Journal, here, covers the political wrangling necessary to pass the juggernaut of competing special interests.

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One response to “The Farm Bill in Brief

  1. Pingback: A Farm Bill for Future Generations | sweep·

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