Action is heating up on the next farm bill, as the Senate Agriculture Committee today completed its markup of their bill which will go to the Senate for consideration. The House is scheduled to release its markup on Wednesday. No surprise – the Senate bill is replete with subsidies and support programs that cost tens of billions of dollars.
Yesterday, in anticipation of the markup, eleven taxpayer and policy groups sent a letter to the House and the Senate with its listing of the “Terrible Twelve” – the twelve most egregious farm policies. The groups urged policymakers to reform or eliminate these costly and distorting programs:
- Direct payments
- Federal crop insurance
- Shallow loss program
- USDA Trade Promotion programs
- Sugar program
- Diary Market Stabilization Plan
- Target prices
- Rural broadband
- Mandatory assessments
- Cotton program
- Ethanol’s Feedstock Flexibility Program
- Biomass Crop Assistance Program
Last week, a coalition organized by CEI sent a letter to policymakers urging reform of the U.S. sugar program, which costs consumers an estimated $4 billion a year in extra costs.
Amendments are likely to be introduced on the floor in both the House and the Senate to reform some of these wasteful programs. But the farm programs are a classic example of concentrated benefits and dispersed costs. In addition, because nutrition and food stamp programs make up the majority of the costs of the farm bill, both urban and rural policymakers form an unholy bipartisan alliance to push farm bills through. Bipartisanship isn’t all it’s cracked up to be.
The Hill picked up our coalition’s release on reforming the U.S. sugar program. The letter, sent to all Senate and House offices, was pretty blunt in its assessment of sugar policy:
The program is an outdated relic of the 1930s that has outlived its purported usefulness. It is a central planning scheme that—
—Allocates the domestic supply
—Restricts imports of sugar
—Sets prices substantially higher than the world price
—Buys up surplus sugar and sells it at a loss to ethanol producers
Ten taxpayer, advocacy, and public policy groups signed on to the missive, which also pointed out who benefits and who loses:
The U.S. sugar program is a classic public choice case of concentrated benefits and dispersed costs: of how special interests can trump the public interest. A small number of sugar producers receive enormous benefits, while the costs are spread across the U.S. economy, hitting consumers and the sweetener-using industries.
The groups urged policymakers to reform or eliminate the program.
A page 1 New York Times story today describes how the Obama administration, despite opposition from civil servants, radically expanded a legal settlement that had already become a “magnet for fraud,” paying out vast sums of money over baseless claims of discrimination at the Agriculture Department in the Pigford case. As the Cato Institute’s Walter Olson notes, its story “today breaks vital new details about how career government lawyers opposed Obama appointees’ insistence on reaching a gigantic settlement for claims of bias against female and Hispanic farmers in the operation of federal agriculture programs” over the objections of “career government lawyers.” As the Times reports,
On the heels of the Supreme Court’s ruling [adverse to claimants and favorable toward USDA], interviews and records show, the Obama administration’s political appointees at the Justice and Agriculture Departments engineered a stunning turnabout: they committed $1.33 billion to compensate not just the 91 plaintiffs but thousands of Hispanic and female farmers who had never claimed bias in court.
The deal, several current and former government officials said, was fashioned in White House meetings despite the vehement objections — until now undisclosed — of career lawyers and agency officials who had argued that there was no credible evidence of widespread discrimination. What is more, some protested, the template for the deal — the $50,000 payouts to black farmers — had proved a magnet for fraud.
The ever-growing settlement became “a runaway train, driven by racial politics, pressure from influential members of Congress and law firms that stand to gain more than $130 million in fees.”
[click to continue…]
“Proposed FDA safety rules frustrate tree fruit farmers,” reported The Washington Post. As the FDA puts “in place a massive overhaul of the nation’s food safety system,” due to the Food Safety Modernization Act, “Few groups have expressed more frustration than tree fruit farmers, who grow apples, pears and a variety of other produce. They complain that the FDA’s approach, in some ways, defies common sense.” The 2010 law is proving far more costly than its supporters promised it would be in order to get enacted. The “Food Safety Modernization Act would impose only modest costs on farmers, or so we kept being assured when it passed in 2010.” But many orchard growers now face tens of thousands of dollars in costs, notes the Cato Institute’s Walter Olson. As he notes, the law’s unexpected costs have caused a furor in some farming communities, and the Town of Brooksville recently became the “ninth in Maine to pass symbolic ‘food sovereignty’ resolution [See Jordan Bloom, The American Conservative; Food Renegade (Dan Brown of Blue Hill)].”
“The FDA has issued two proposed rules to implement the Food Safety Modernization Act enacted in 2011.” [Brian Wolfman, Public Citizen, including details and links; The Packer] “The costs to fruit and vegetable growers for complying with the newly proposed produce safety regulation have been estimated at more than $30,000 annually for large farms and about $13,000 per year for smaller farms.” [The Grower] As Olson observes, this could be an enormous burden for some farmers: “How much do typical US farm households make in a year, you may wonder? According to U.S. government figures (here and here, for example) a large proportion of smaller family farms make little or no profit, and are instead supported by the off-farm earnings of family members.”
Liberal newspapers trumpeted the passage of the Food Safety Modernization Act, while ignoring its potential harms to innovation, small business, and the availability of unconventional foods. CEI’s Greg Conko, who studies biotech and food safety regulation, earlier explained how the bill’s expensive and cumbersome red tape might thwart “firms from developing innovative new processes and practices that could deliver real food safety improvements.” Earlier versions of the bill backed by left-leaning interest groups were even worse, and would have driven “out of business” many more “local farmers and artisanal, small-scale producers of berries, herbs, cheese, and countless other wares, even when there is in fact nothing unsafe in their methods of production.” The version of the bill ultimately enacted was less extreme, but even it could “leave tens of thousands of small and mid-sized farms and food stands to be crushed under the weight of rules designed for some of the world’s largest food processors,” Conko observed.
Have a listen here.
Senior Fellow Angela Logomasini talks about her forthcoming CEI study, “Rachel Was Wrong: Agrochemicals’ Benefits to Human Health and the Environment.” Fifty years ago in her book Silent Spring, Carson argued that pesticides and other chemicals would increase cancer rates; they have actually gone down despite increased life expectancy. Carson argued that chemicals would reduce environmental quality; indicators have actually improved almost across the board, and high-yield farming feeds more people while leaving more habitat for wildlife. Carson argued that chemicals would increase food-borne illnesses; again, they have gone down.
The first Thanksgiving didn’t usher in a time of plenty for the Pilgrims. The Pilgrims continued to confront the specter of starvation until they ditched their collective farming practices in favor of individual property rights, which finally brought them prosperity by increasing incentives to produce and manage farms wisely. Property rights were also a feature of many Native American cultures, contrary to later claims that Native Americans had no concept of property rights (claims first invented by those who dispossessed them, and later repeated by radical environmentalists who sought to depict property rights as an institution peculiar to white settlers). I debunk some of these myths at this link.
Have a listen here.
Senior Fellow Greg Conko discusses his new paper, “Is There a Future for Generic Biotech Crops? Regulatory Reform Is Needed for a Viable Post-Patent Industry.” Patents will soon expire for several popular biotech crops, opening the way for cheaper generic versions. But because, unlike prescription drugs, biotech crops have to be re-approved every few years, the future of generic biotech crops is very much in doubt. Conko recommends getting rid of re-approval requirements to put them on the same footing as other products.
Have a listen here.
Major forthcoming rules from a variety of agencies have been delayed until after the November elections, possibly for political reasons. Among them are FDA food safety regulations with a $1.4 billion annual price tag. Senior Fellow Greg Conko argues that these rules should be scrapped altogether for two reasons: 1) They will do little to improve food safety, and they will give large food corporations an unfair competitive advantage over smaller producers.
The FDA recently decided to delay implementing about $1.4 billion of food safety regulations until after the November election. The USA Today editorial board argues in today’s paper that the FDA should stop dragging its feet and enact them now. They were kind enough to give Greg Conko and me some space to put forth an opposing view. We think the FDA should scrap the rules entirely for two reasons: ineffectiveness and rent-seeking:
These rules, being drafted to implement last year’s food-safety law, will waste billions of dollars on antiquated practices unlikely to do much good. They will, however, aid giant food corporations by hobbling smaller competitors and make it harder for companies of all sizes to adopt innovative safety methods and technologies.
Enacted in response to 2010′s massive egg recall, the law will spend nearly $1 billion to double the number of inspections on farms and in food processing facilities. That may sound appealing, but it only means that most facilities will be inspected every five years instead of every 10. Designated “high-risk” facilities would be inspected just once every three years.
Read the whole thing here.
Have a listen here.
Severe drought in the Midwest has driven corn prices to record levels. Policy Analyst Brian McGraw argues that ending the federal government’s ethanol mandate could help families who are struggling to pay their heightened grocery bills. Under the mandate, nearly 40 percent of this year’s corn crop will be used for fuel instead of food.
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