The Farm Bill debate does hinge on subsidies
This is a guest post from Britt Lundgren, an Agricultural Policy Fellow at Environmental Defense.
Tom Philpott’s recent column on the ongoing debate over Farm Bill reform raises some interesting points, including the idea that commodity subsidies may not be the root cause of overproduction. But he misses the real point behind the debate, which is whether or not the current suite of farm subsidies are actually an effective and productive way to support agriculture in the U.S.
Supporters of farm bill reform recognize that it is possible and necessary to replace our antiquated system of farm subsidies with a cost-effective farm safety net that works for all farmers, and that this change can free up funds that can be spent on other priorities within the Farm Bill, such as conservation and nutrition.
Much of the debate over Farm Bill reform centers on spending priorities. According to the Environmental Working Group’s Farm Subsidy Database, 10 percent of the beneficiaries of commodity subsidies received 66 percent of all the money spent on subsidies between 2003 and 2005. Because 6 out of 10 farmers don’t get any subsidies at all (they grow vegetables, fruits, nuts or other crops that aren’t eligible for subsidies), this means that during this period, just a tiny fraction of the farmers in the US collected over $22 billion in payments. Despite all of the money we pour into farm subsidies, most small and medium-sized farmers are still struggling to make ends meet.
And at the same time that the federal government is writing seven-figure checks to some farmers, the USDA is turning away two out of every three farmers who apply for USDA conservation programs, and the average food stamp recipient is expected to make do with just $1 a meal in support. How is this an equitable — or sensible — allocation of taxpayer dollars?
All across America, people are calling for a better Farm Bill that does more for farmers, consumers, the environment, and rural communities, rather than one that gives seven figure checks to millionaires. Despite the public outcry, the Senate Agriculture Committee sent a bill to the Senate floor that is, essentially, more of the same.
The bill now being considered does provide $4.8 billion more for conservation over the next five years, important conservation program reforms, and increases in nutrition funding. However, those increases pale in comparison to the amounts going to more subsidies. In March, the Congressional Budget Office estimated that direct payments — given to farmers even when prices are high and farmers are doing well — will cost $26 billion over the next five years under current policy. Without reform, these payments will keep going to the same seven states and 19 congressional districts that already gobble up more than half of all farm spending.
So far, the Senate Agriculture Committee has not only ignored calls for reform of our outdated, unfair subsidy system, they’ve actually increased support for some crops and added new ones to the subsidy roll. In addition, the Farm Bill being considered on the Senate floor this week includes a new $5.1 billion "permanent disaster" program, which will also concentrate payments in the hands of a few, if past experience with disaster funds is any indicator.
According to the Environmental Working Group, over the past 21 years, just five states account for 67 percent of "chronic recipients" of disaster funding. That is, two thirds of farmers who collected disaster payments at least every other year for the past twenty years farm in these five states — North and South Dakota, Texas, Oklahoma and Georgia.
In some areas, particularly the Northern plains, cycles of prolonged drought are normal. Does it make sense to keeping giving "disaster" relief where so-called "disasters" are just normal weather? It’s also worth noting that the "farmer safety-net" created in the 2002 Farm Bill was supposed to eliminate the need for disaster payments. If we had a safety net that really helped farmers weather the ups and downs of agriculture, we wouldn’t need a permanent disaster program, would we?
Some Senators, thankfully, are standing up for a better Farm Bill. Many amendments will be offered to reform the Farm Bill and reinvest the savings in conservation, healthy food, nutrition, renewable energy, and rural development. Senators Richard Lugar (R-IN) and Frank Lautenberg (D-NJ), for example, are proposing to replace the current subsidy system with a modernized safety net, and in the process save taxpayer dollars that can be reinvested in priorities like conservation and nutrition.
Despite what the American Farm Bureau would like you to believe, the Lugar-Lautenberg amendment to the Farm Bill is not about gutting the commodity subsidy system and letting farmers go it alone. It is about replacing depression-era price supports with modern risk management tools, including county-based revenue insurance and whole farm insurance tools that will be available for free to all farmers, not only commodity growers. This new safety net will level the playing field for all farmers by ending the skewed distribution of commodity subsidies that drives up land prices and accelerates the consolidation of small and mid-sized farms.
The Lugar Lautenberg amendment will generate billions in savings that will be reinvested in conservation programs, increasing food stamp benefits, funding programs that improve access to healthy, locally grown produce for people with low incomes, children, and senior citizens, and other important programs,. These are changes that will benefit farmers and consumers everywhere.
Senator Lugar and Senator Lautenberg aren’t the only ones that have offered proposals for Farm Bill reform. An amendment by Senators Chuck Grassley (R-IA) and Byron Dorgan (D-ND) would cap subsidy payments and close loopholes that allow farmers and non-farmers alike to collect million-dollar checks. Another amendment from Senators Sherrod Brown (D-OH) and John Sununu (R-NH), called "RESCU," would cut the outrageous subsidies provided to the crop insurance industry, which currently consume more than 40 cents of every dollar taxpayers put into crop insurance. The savings from these reforms, which will reduce insurance companies’ windfall profits but will not impact farmers, will go toward critical conservation and nutrition programs. And Senator Menendez (D-NJ) will offer an amendment that will reduce direct payments by less than 10% in order to increase funding for conservation, nutrition, and farmers markets.
These amendments are critical to reforming the Farm Bill, but "farm politics as usual" will prevail unless you make your voice heard. Send and email or make a phone call and urge your senators to vote for these amendments. Urge your senators to vote for healthy farms, healthy foods, and a healthy environment. It’s about time.