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  • Farm Bill: A Response to President Obama

    In his recent remarks, President Obama made a push to get a new farm bill enacted by the end of the year.

    Sound agriculture and food stamp policy should be the goal, not getting a farm bill done at all costs based on an artificial timeline. The House and Senate are going to conference on their flawed farm bills, making it unlikely that good policy will come out. It would be better to have an extension than to lock in five years of bad policy.

    Good policy would free farmers and ranchers from government intervention and recognize that the agriculture sector is a prosperous and innovative sector of the economy. Food stamps would promote self-sufficiency by requiring work for able-bodied adults.

    President Obama is absolutely right, though, when he also said policymakers should focus on the American people when it comes to the farm bill. However, the interests of the American people are not the focus when:

    • A new program would force taxpayers to cover minor losses for farmers (referred to as “shallow loss”). Even minor or routine business losses would be covered. The usual justification of the farm bill as a safety net would go out the window, as taxpayers would effectively be guaranteeing revenue for farmers.
    • Sugar and dairy programs would continue to manipulate supply, thereby driving up food prices. Ironically, even as food stamps are a major part of the farm bill debate, both farm bills would drive up food prices.
    • The Market Access Program forces taxpayers to spend around $200 million a year to help multinational companies and trade associations with their overseas marketing efforts. This includes such “important” endeavors as promoting organic hair products for dogs and hosting international wine tastings.
    • Marketing orders, which were created in 1937, seek to limit supplies of certain commodities. The raisin marketing order has received significant attention due to a recent United States Supreme Court case, Horne v. USDA. The government forces raisin farmers to turn over a significant percentage of their raisins in order to limit supply, sometimes without compensation.
    • The House and Senate bills increase the costs of crop insurance, the most expensive farm program. President Obama, on the other hand, would cut these costs by about $12 billion over 10 years.
    • The House bill would seek to impose the Christmas tree tax that was blocked by the Obama Administration.
    • The Senate bill would do almost nothing to address food stamp reform. Even the House bill fails to impose a mandatory work requirement, the heart of food stamp reform.

    A farm bill should serve the interests of the American people. This first starts with taking politics out of the bill. By separating out food stamps from the agriculture programs, these critical issues could be considered on their own merits. Otherwise, the unholy alliance of rural legislators (who tend to support agriculture programs) and urban legislators (who tend to support food stamps) helps to get a bill through without proper review or a chance at real reform.

    Regardless of whether it is done this year or down the road, the next farm bill shouldn’t keep the status quo. Agriculture policy should reflect the realities of 2013, not 1933, and it shouldn’t be based on policies that would have made a Soviet central planner blush. It’s past time for legislators who claim to be in favor of free markets to apply those same beliefs to agriculture as they would for any other industry.

    Posted in Capitol Hill, Economics, Front Page [slideshow_deploy]

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