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This Year's Farm Bill Threatens To Be a Bigger Monster Than Ever


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https://reason.com/2023/03/29/this-years-farm-bill-threatens-to-be-a-bigger-monster-than-ever/

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In many ways, the farm bill up for consideration this year in Congress embodies all that is wrong with American lawmaking. It's a massive piece of legislation, combining unrelated matters to commit the U.S. government to spending mind-bending amounts of money at a single go. Passed roughly every five years, farm bills are less about legislating in any deliberative sense than they are about lawmakers packaging a trillion-plus dollars of goodies and committing taxpayers to fund them for years to come—and then doing it over and over again.

"Every five years, Congress passes legislation that sets national agriculture, nutrition, conservation, and forestry policy, commonly referred to as the 'Farm Bill'," the U.S. Senate Committee on Agriculture, Nutrition and Forestry blandly notes. "The Committee formally kicked off its process for the 2023 Farm Bill with field hearings in both Michigan and Arkansas in 2022. Hearings continued in November and December of 2022, and will continue throughout the early parts of 2023."

Worse Than You Think

In the popular imagination, to the limited extent most people think about the issue, "farm bill" is largely synonymous with lingering New Deal-derived subsidies to farmers, and those are certainly in there. But there is also so much more.

"The farm bill funds a safety net for farmers through crop insurance and support for those growing key commodities, as well as nutrition programs run by the Agriculture Department, primarily food stamps," The Wall Street Journal's Kristina Peterson noted in November. That weird blend of programs is a result of the horse-trading "which since the 1970s has yoked support for farmers, including crop insurance, to funding for food stamps," she added.

That combination of food stamps and farming subsidies is the sort of unholy political deal that makes cutting government spending so challenging. That's not an accident.

A Match Made in Legislative Hell

"By 1973, the number of congressional districts dependent on farming were shrinking, but farm bills had grown in cost and frequency," Ryan Alexander, then-president of Taxpayers for Common Sense, pointed out in 2018 as the debate raged over the last farm bill. "How to maintain support for the shrinking farm constituency? By adding food assistance – at the time, food stamps – to the package. The shotgun marriage of farm aid and food stamps meant rural and urban members of Congress came together to get the farm bill over the finish line."

That not only means that the farm bill is an unhappy blend of unrelated matters jammed into a single compromise piece of legislation, but that its spending emphasis is not what you might expect.

"Although we think of the farm bill as a subsidy bill, it's actually heavily tilted toward nutrition—in the last (2018) farm bill, for example, more than 75 percent of federal outlays were actually for SNAP and related programs," the Cato Institute's Scott Lincicome observed in 2020.

SNAP is the Supplemental Nutrition Assistance Program, better known as "food stamps," that subsidizes the food budgets of lower-income families (monthly benefits averaged $239 in 2018 and were temporarily increased during the pandemic). It now consumes the lion's share of spending in the so-called farm bill. But that doesn't mean that farmers are getting shortchanged in their take of other people's money. Oh, no, they do quite well themselves.

"This year, farmers (on net) will derive almost 40 percent of their income directly from the U.S. government," added Lincicome. "Given the duration and magnitude of federal support, there's perhaps no U.S. industry that has attracted more taxpayer subsidies—more consistently—than agribusiness."

This unhappy merger of interests means a lot of tax money being spread around.

A Trillion Here, a Trillion There…

"The 10-year baseline (FY2024-2033) for the Farm Bill is projected to be over $1.4 trillion, or roughly $140 billion each fiscal year," estimates Jonathan Coppess of the University of Illinois's farmdoc daily. "Food assistance through the Supplemental Nutrition Assistance Program (SNAP) accounts for 85% of the projected Farm Bill spending. For farmers, the largest share is for crop insurance (7%)."

That's only an estimate since members of Congress are hashing out the details of the legislation. The House and Senate Agriculture committees are still holding hearings on the farm bill as are individual members of Congress. But those hearings are more likely to shift money around among various subsidy programs than to seriously curtail giveaways or reduce the overall cost of the final bill. After all, as Rep. Glenn "GT" Thompson (R-Pa.), chairman of the House Committee on Agriculture, commented this week: "The Farm Bill is one of few remaining pieces of legislation steeped in consensus."

That's probably true. If Congress still agrees on anything, it's that money milked from taxpayers should be used to pay off supporters and purchase votes. And everything costs more these days, votes included.

"Increases in the Nutrition title since 2018 reflect consequences of the Coronavirus Disease 2019 (COVID-19) pandemic, inflation, and administrative adjustments pursuant to the 2018 farm bill. For the non-nutrition agriculture programs in the farm bill, current economic projections are that program outlays would be $221 billion over the next 10 years, 5% greater than at enactment in 2018," the Congressional Research Service projected last month.

The nonpartisan agency added that "since FY2020, Congress and the White House have provided supplemental pandemic assistance of over $30 billion to farms and over $60 billion for nutrition assistance." Future supplemental spending may further increase the final farm bill price tag.

Monster Subsidies That Are Unnecessary, But Seemingly Unstoppable

Cato's Lincicome pointed out that Australia and New Zealand both largely eliminated agricultural supports years ago and remain major producers. Their farmers learned to adapt and innovate in response to the market.

"In the midst of a financial crisis in the mid-1980s, New Zealand decided to swallow a bitter pill and scrap all farm subsidies," The Times of London reported in 2017. "There were nationwide protests, more than 50 suicides as land values plummeted and interest rates soared for indebted farmers no longer eligible for cheap finance. Yet today the country's farm sector is thriving and much more diversified."

But the legislative Frankenstein monsters that are modern U.S. farm bills create mutually reinforcing lobbies for raiding taxpayers and spending their money. That makes New Zealand-style agricultural reform enormously difficult, with SNAP rolled into the deal.

This isn't just about the seemingly unstoppable beast that is federal agricultural spending. This is also a cautionary tale about government meddling and subsidies in markets. At a time when the Biden administration is actively promoting industrial policy as a means of promoting American jobs and manufacturers (and making them dependent on government largesse), the farm bill demonstrates the dangers in unleashing policy monsters on the world.

Yep, this legislation is no longer a Farm Bill,  it's a Food Stamp Entitlement Bill.

 

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More on the evils of the Farm Bill:  https://mises.org/wire/current-farm-bill-fraud-government-usual

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The 2018 Farm Bill is due to expire this year, and US lawmakers have already begun working out the next version. This food-related omnibus bill was introduced ninety years ago as a “temporary” measure during the Great Depression. It’s been reauthorized by Congress every five years since, and recent ones cobble together two seemingly unrelated programs, the Supplemental Nutrition Assistance Program (SNAP), formerly called food stamps, and federal farm subsidies.

However, the two share an important link. One program gives tax dollars to those who cannot afford food; the other seeks to make food less affordable. Taxpayers are forced to help prop up crop prices only to be taxed again to address the consequences. The American people must wake up to the scam hidden in the Farm Bill if we ever wish to see it end.

SNAP gets the most attention during Farm Bill negotiations in part because it eats up most of the bill’s price tag. However, it is also the only Farm Bill program where negotiations fall neatly within party lines. Negotiations over farm subsidies are less partisan. Lawmakers mostly push to secure benefits for their districts and friends in the industry. This year, the media is focused on the Democrats’ push for more funding and fewer restrictions for those relying on SNAP. Republicans are voicing concern about government spending and pushing for more restrictions on those receiving benefits.

If Democrats were serious about wanting to help the poorest Americans afford food and Republicans were serious about wanting to cut federal spending, they could accomplish both these goals by rolling back the other part of the Farm Bill. From the beginning, America’s farm subsidies have always aimed to do one thing above all: keep crop prices high.

In his book, America’s Great Depression, Murray Rothbard notes that American farm subsidies have their roots in several failed cartelization attempts in the 1910s and 1920s. Farmers formed organizations like the National Wheat Growers’ Association and American Cotton Association. These groups then tried to collectively cut production to bring about higher prices. As Rothbard explains, “The chief stumbling block in all these schemes was the noncooperating farmer, the rugged individualist who profited by expanding his production while his rival farmers cut theirs.”

Arbitrarily raising prices did not work on the free market—government assistance was needed. This assistance came in 1929 when President Herbert Hoover signed the Agricultural Marketing Act. With that, the alliance between the federal government and Big Agriculture was born. This alliance would spend the Great Depression wrestling with the laws of supply and demand. When the government raised prices, output increased, threatening to bring prices back down. The solution, made famous in John Steinbeck’s 1939 novel, The Grapes of Wrath, was to burn crops, kill livestock, and spray produce with toxic chemicals. The government destroyed food to keep prices high while Americans starved.

Today, farm policy is far less dramatic because we are not currently in an economic depression. However, the primary goal of the agricultural portions of the Farm Bill remains the same. The government restricts the domestic supply of certain crops to keep prices well above the world price. Take sugar, for example. Each year, a United States Department of Agriculture (USDA) planning board awards market allotments to a handful of sugar producers, directing them on the total supply they can produce that year.

For fiscal year 2022, the USDA ordered the production of exactly 10,370,000 tons of cane and beet sugar. American Crystal Sugar, which spends the most on lobbying of any sugar producer, was awarded the largest allotment, meaning they were legally guaranteed the most sugar sales. They also get to make those sales at a price double the global market rate. The federal government also props up the domestic prices of milk, cheese, peanuts, avocados, onions, beef, poultry, cotton, tobacco, and more.

The Farm Bill subsidizes farms more directly through crop insurance. Taxpayers are forced to pay 60 percent of crop insurance premiums. Part of the program insures against crop loss, which, when subsidized, leads to riskier farming practices and crop allocations. The subsidized insurance also protects farmers from losses incurred by falling crop prices. There are fourteen companies authorized to sell subsidized crop insurance, and they are required to sell to every eligible farmer who requests it. The USDA also determines which crops are insured and at what rate on a county-by-county basis.

This ability to choose which crops get insured, combined with the scale of the subsidies, gives Washington a great deal of control over the nation’s food supply chain. Democrats are working to use that control to compel farmers to adopt “climate-friendly” practices, while some Republicans want to force farmers to join their crusade against China.

The Farm Bill creates the very problems it then promises to solve. The Democrats may say they want to help the poor afford food. Republicans can claim they want to cut spending. However, both want to keep prices high to benefit Big Agriculture and then use that leverage to steer America’s food supply chain to align with their own agendas. Washington is ripping us off every five years. To stop a recurring nightmare, we must first wake up.

WAKE UP!

 

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