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Rescue Taxpayers from Flawed Farm Policy

Posted By Diane Katz On August 1, 2012 @ 5:00 pm In Economics | Comments Disabled

House leaders on Tuesday proposed a drought relief package for ranches, orchards, and nurseries as a substitute for the massive five-year farm bill [1] that has been stalled for weeks in the deeply divided chamber.

But the very same flaws [2] that have sidelined the omnibus farm bill—lavish subsidies and perverse incentives among them—likewise taint the new ad hoc measure. Wrong-headed policy is no less objectionable when delivered in small packages.

The current farm bill expires on September 30, but lacking votes for passage of the $957 billion H.R. 6083 [3], House Speaker John Boehner (R–OH) has denied a floor vote on the bill (which was approved July 12 by the Agriculture Committee). Its counterpart, S. 3240 [4], has been approved by the Senate. Boehner initially considered a vote on a one-year extension [5] of current farm programs, but that option, too, was rightfully rejected.

Now comes the Agricultural Disaster Assistance Act of 2012, which would reauthorize for fiscal year (FY) 2012 (retroactive to October 2011) several disaster relief programs that expired on September 30, 2011. The measure is focused on livestock and specialty crops, because taxpayer-financed crop insurance will compensate the vast majority of other farmers.

In all too typical fashion, the package goes well beyond emergency drought assistance. It’s unnecessary, for example, to offer emergency subsidies to ranchers for livestock killed by raptors and wolves (along with hurricanes, floods, blizzards, disease, and extreme cold). Also of note is the formula to reimburse ranchers for the cost of feed, which takes the higher of two pricing options. Let’s not even get into the subsidies for farmed fish and honey bees.

Are proponents of the bill oblivious to the $11 trillion public debt currently encumbering the U.S. economy?

The largesse will supposedly be paid for from cuts to conservation programs, such as deferring for a year the addition of 11 million new acres in the Conservation Stewardship Program (which pays participants to implement conservation practices). Some $350 million would also be trimmed from the $1.75 billion otherwise authorized for FY 2013 for the Environmental Quality Incentives Program (which underwrites the cost of addressing “natural resource concerns”). Untouched, however, is the $1.75 billion slated for the program for this year (2012) and for 2014.

Farming is risky, to be sure, but so are all other entrepreneurial endeavors. There are also rewards to balance the hardships. 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. Congress should be focused on eliminating unwarranted farm subsidies, not distributing them piecemeal.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2012/08/01/rescue-taxpayers-from-flawed-farm-policy/

URLs in this post:

[1] farm bill: http://www.heritage.org/research/reports/2012/07/shallow-loss-the-2012-farm-bill-s-new-subsidy-program

[2] flaws: http://www.heritage.org/research/reports/2012/06/farm-bill-2012-agriculture-policy-ripe-for-reform

[3] H.R. 6083: http://www.cbo.gov/publication/43486

[4] 3240: http://www.gpo.gov/fdsys/pkg/BILLS-112s3240pp/pdf/BILLS-112s3240pp.pdf

[5] extension: http://www.heritage.org/research/reports/2012/08/farm-bill-extension-dodging-agriculture-reform-will-not-do

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