Last night House and Senate conferees agreed on a nearly $1 trillion farm bill that would eliminate long-standing direct payments to farmers but beef up the heavily subsidized crop insurance program. Farmers are pretty happy about that because federal crop insurance covers farmers’ crop losses or revenue losses, while the government pays a high percentage of the premiums’ costs and underwrites most of the insurance companies’ administrative costs.
The five-year farm bill replaces the 2008 farm bill, which had expired and was extended because Congress could not reach agreement on components of a new bill.
The command-and-control sugar program remains in place, with its combination of controls on domestic supply, price supports, and restrictions on sugar imports. It has been estimated that the sugar program costs consumers up to $4 billion a year in increased costs, while driving many confectionery companies out of business or out of the country.
The bill would also continue U.S. country of origin labeling requirements for meat – COOL – even though the protectionist program is being challenged by Canada and Mexico as being discriminatory under World Trade Organization rules. COOL requires labeling that indicates where the animal was born and raised, where it was slaughtered and processed.
The conference agreement would include modest cuts to the food stamp program – about a one percent cut over 10 years or about $9 billion. Originally the House had pushed for more extensive cuts, but the Senate balked at those.
While the chairmen of the House and Senate Agriculture Committees, Rep. Frank D. Lucas, R-Okla., and Sen. Debbie Stabenow, D-Mich., praised the bipartisan agreement, one of the most influential members of the Senate Agriculture Committee and a Farm Bill conferee, Senator Pat Roberts (R-KS), was strongly critical of the outcome and said he will not support the bill. In a press release, he said:
“I am disappointed to say that the negatives of this Farm Bill outweigh the positives. When you look at the policies of this report, we have a return to government subsidies and farmers planting for the government. While we all want to provide certainty to producers, the conference has missed an opportunity for greater and necessary reforms to our nation’s farm programs, federal nutrition programs, and burdensome regulations. I cannot march backwards and deliver more spending, more regulations and more waste.”
Last year there was a slim chance that real reform could happen. Although the Senate passed its version of the farm bill on June 10, 2013, the House voted down its own bill on June 20, principally because House Democrats objected to a food stamp reform and some Members wanted significant cuts in the bloated agricultural subsidy programs.
At that point, CEI and other free-market groups called for the agriculture programs to be split from the food stamp provisions. In that way, each of those components could be evaluated and debated on its own merits, instead of the horse-trading that occurs among urban supporters of food stamps and rural proponents of agricultural subsidies. The House did indeed split the bill, but introduced no real reforms in the agriculture provisions – in fact, the bill was made even worse by proposing to make it permanent law.
Now, with this conference report, there’s little room for reform, except for those principled enough to stand up to their leadership and demand that the most egregious programs be cut. The more likely scenario is another five years of taxpayer- and consumer-funded largess for agriculture interests.