Farm Bill Stalled Because Farmers Don’t Care

With the nation’s attention on presidential campaigns and conventions, some feel there has been insufficient focus on renewing the farm bill.  House Agricultural Committee Chairman Frank Lucas (R-OK) explained this decreased momentum also stems from a lack of interest on the part of farmers.  National Journal (sub. req’d) reports:

“The constituents are actually surprisingly calm,” Lucas said. “That’s one of my big concerns when we return. Part of the key to securing floor time is being able to stress how important this is.”

Lucas said that with national attention shifting away from the drought and onto the “hoopla” of political conventions and big-ticket discussions about the budget, he has become “very concerned about just how fired up [about the farm bill] the membership will be when they return.”

You can never underestimate the impact of public sentiment on Congress.  If an institution designed to be deliberative and somewhat slow moving does not get a public boost from a core constituency (in this case, farmers), legislation can stall.  But even a public push to get the farm bill passed in its current form is ill advised considering the following five facts:

  1. Farm income hits record high.  According to the USDA, net farm income is estimated to set a new record of $122.2 billion in 2012 due to corn prices, soybean receipts, and the massive increases in crop insurance indemnities.
  1. Ethanol mandate exacerbating drought.  A study by three agricultural economists at Purdue University found the mandate was exacerbating the economic impact of the drought.  If the mandate is even partially relaxed, corn prices could drop by 20% next year.
  1. Ranchers knew insurance would expire.  Ranchers had over four years to plan for the expiration of livestock-specific disaster programs during which time they could have diversified their product lines, purchased insurance at market rates, leveraged assets, or maintained cash reserves, as the Washington Post editorialized.
  1. 80% of spending goes toward food stamps.  The farm bill is a misnomer.  In reality, 80% of the spending in the so-called farm bill actually goes toward the Supplemental Nutrition Assistance Program, commonly referred to as food stamps.
  1. Food stamp recipients hit record high.  A new report from the USDA found that a record 46.7 million people received food stamps in June.  Spending on food stamps has doubled in the past four years, growing from $39 billion a year in 2008 to some $80 billion a year in 2012.

Meaningful agricultural reform is necessary, but the Federal Agriculture Reform and Risk Management (FARRM) Act of 2012 (H.R. 6083) is not the answer.  Should it become law, it would not only provide for exorbitant spending on food stamps, but it would also give farmers special treatment not afforded to entrepreneurs in other sectors of the economy.

The Heritage Foundation offers the following analysis and suggestions:

Farming is risky, but so are all other entrepreneurial endeavors. There are also rewards to balance the hardships. As it is, farm subsidies, commodity quotas, and tariffs largely enrich upper-income producers of grains, oilseeds, cotton, milk, and sugar and ignore most other commodities. It is time for farmers to assume responsibility for their business, just as business owners do in every other sector of the economy. A variety of options exist, including diversifying product lines, buying insurance at market rates, leveraging assets, and maintaining cash reserves.

With federal public debt exceeding $11 trillion, shifting even more of the costs of agriculture risk to taxpayers is simply unsustainable. Moreover, it is fundamentally bad policy. Congress should act now to eliminate unwarranted farm subsidies across the board. Real reform will require entirely new legislation—without piecemeal handouts to ranchers.

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