Did Obama screw up ag subsidy reform?
Over the weekend, the NYT detailed the trials and tribulations of the Obama administration’s attempts to trim farm subsidy payments of a certain size:
Among the audacious proposals in President Obama’s budget was a plan to save more than $9.7 billion over a decade by putting strict limits on farm subsidies that are disbursed regardless of market conditions or even whether the land is actively farmed.
But Mr. Obama’s grand ambitions have run into political reality.
The budget outlines approved by the House and Senate on Thursday night do not include limits on farm subsidies at all, and even champions of change say that if the president’s plan can be revived, it will have to be scaled back so significantly that the savings could amount to just several hundred million dollars.
…The White House plan would have prohibited so-called direct payments to farms whose annual gross receipts exceeded $500,000 — a large sum on the surface, but one that did not take account of whether those receipts yielded any real profits.
The article goes on to lay out the bipartisan scorn heaped on the proposal (in which you can further revel here). Thus, having enjoyed weeks of bad-mouthing the idea, Congress went ahead and removed every trace of the direct payments cut from the final budget bill. Congress has now made it clear that there will be no significant attempt to rein in ag subsidies this year.
Ken Cook of the Environmental Working Group, itself a strident critic of the current farm subsidy regime, offers a concise explanation for the administration’s failure:
[He] suggested that the administration had done a more careful job in laying the groundwork for initiatives on climate change and health care. “In this case,” he said, “it was thrown out there and those of us on the reform side of the agenda really found ourselves in an awkward position.”
While the proposed plan came with an intriguing, and potentially game-changing, system of ecological services payments that would in theory make up for lost farm subsidy payments, the cut in the direct payments program was really the kind of reform that only a deficit hawk could love. The idea of restricting payments to farmers with more than $500,000 in annual sales smacks of the “waste, fraud and abuse” school of budget-cutting. And I’d also suggest the plan revealed Obama’s senatorial “bias.” The Senate version of the 2008 Farm Bill, for example, included a much stricter limit on income for farmers to receive subsidies ($250,000 vs. $750,000 in the final bill) — the lower limit really did have bipartisan support in the Senate. Obama may have believed there was plentiful support for those kind of targeted cuts. Even, so, and as I’ve observed before, this “reform” would leave intact the current system with its focus on commodity crops like corn, soy, wheat and cotton. We’d be paying fewer subsidies, sure. But we’d still have a system that encourages the overproduction of corn and soy and the underproduction of fruits and vegetables.
And going back to Ken Cook’s comments, it’s clear the proposal didn’t come out of any particluar political process — when it was announced it caught everyone by surprise, not exactly a recipe for success when it comes to reform. This all flows from the fact that the politics of food system reform are themselves so embryonic. Making matters worse, the progressive food grassroots, at least as a political movement, are still somewhat split between eaters and producers — generally speaking they’re on the same side, but there isn’t yet a consensus between them on the precise path to reform. There’s no equivalent to “cap-and-trade” for agricultural subsidies, i.e. a meaningful blueprint (much less a catchphrase) that encapsulates the necessary elements of reform. Lacking such a plan, some in the reform movement have a dangerous tendency to simply demonize subsidies (and by extension those who receive them) — the EWG is a prime example of this approach. The focus is entirely on how wasteful the subsidy regime is rather than on ensuring we’re subsidizing the right things.
Before we have any hope of changing the current system, food policy progressives — both eaters and producers — need to do the hard work of coalescing around an alternative. Little discussed among eaters, but of prime concern among progressive producers, is the fact that the American system of subsidies has been slowly transformed from one that was focused on supporting farmers (via price supports and a federal grain reserve) to one that allowed prices to move as low (or as high) as the “market” demanded. The old system established during the New Deal didn’t just help farmers, it also effectively managed supply. The current system with its incentives for overproduction (the only way to make money is to grow more corn or soy even if that causes the price to drop further) works mostly in the interests of food processors — they derive the lion’s share of the benefits. And that corn and soy is mostly a raw material, rather than a food. The vast majority of it gets processed into food additives or livestock feed.
As a result, we are swimming in cheap calories that have the nasty side effect of making us fat and giving us diabetes and heart disease. But if you’re not willing to admit all that, then you have to let the deficit hawks drive reform, which is what the Obama administration did.
Where does that leave us? Well, Dave Murphy of Food Democracy Now is currently running his new organization through its paces. He is mobilizing his mailing list to submit comments to the USDA on a rule that could close a loophole that allows people who aren’t “actively engaged in agriculture” to still receive subsidy payments (see here to make sure emailed comments don’t bounce). This is also a “waste, fraud and abuse” reform, but it’s certainly necessary. And it will demonstrate what kind of power FDN has and if it can establish itself as a political force in ag policy — a force that can help accomplish the heavy lifting necessary for real reform.
But beyond that, we need to find a structure that brings producers and eaters together expressly to establish the blueprint we desperately need. Otherwise, ag subsidy reform will inevitably suffer the fate of Obama’s direct payments proposal — reform that’s DOA.
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