Farm Bill Negotiated In Secrecy

by Daniel Rivera Greenwood on November 15, 2011

in Agriculture, Trade

The Hill reports that a new “secret Farm Bill” will be included with the super committee’s debt deal. As The Hill points out, legislators are “using the super committee to avoid what would be a more public, election-year debate in 2012, when the current farm bill expires and new legislation would be scheduled for writing.”

As mentioned on OpenMarket before, this presents a big moral hazard problem. Legislators are using the secrecy and lack of accountability present in super committee deliberations and adding legislation beneficial only to narrow sectors of the economy. In the farm bill’s case, the super committee asked members of the Agriculture Committee to come up with $23 billion in cuts by November 1, and although the deadline has passed, the Agriculture Committee is still working on the proposal. Beyond these details, information is difficult to obtain.

Under “normal” farm bill negotiations, input from farmers, communities and advocacy groups would be accounted for, and negotiations would be made public. With the super committee, the bill is being negotiated behind closed doors, and would be passed as part of the debt reduction deal, not as a stand-alone bill.

Among possible bills, the American Farmland Trust has put together a review of 10 different proposals, and highlights their strengths and weaknesses. Most proposals would eliminate direct payments, as well as other costly and inefficient programs like ACRE (Average Crop Revenue Election) but still give considerable aid to farmers. The American Farmland Trust published a report that summarizes 10 proposals and their components.

The small amount of information that is leaking about the farm bill negotiations seems to point toward a bill that would eliminate direct payments but would tie handouts to commodity prices. While this might eliminate costs when commodity prices are high, costs could balloon if prices fall. In a free market, lower prices might signal producers that they should close their operations or switch to more profitable products. In this system, it rewards bad investments and misuse of land. A new type of crop insurance program may also be included in the recommendations.

While these subsidies are costly to taxpayers, some legislators are moving to eliminate some of the more costly and inefficient programs. The Free Market Sugar Act, introduced by Rep. Joe Pitts (R-Penn.), and Danny Davis (D-Ill.), would repeal the loan program to sugar producers and eliminate most sugar imports and production controls, resulting in cheaper sugar. These representatives have candy manufacturers in their districts, which have difficulty competing because of the high costs of domestic sugar. Their bill shows that alternatives exist, at no cost to taxpayers, which would give back some competitive advantage to the United States.

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