Is a payment cut real reform or just tweaking with the numbers?
Tom Vilsack has certainly got farm-state legislators talking. The buzz generated by the Obama administration’s proposal to cut "direct payments" to farmers continues to grow. Unfortunately, all the sturm and drang may be for naught. And not necessarily because the cut to this particular agricultural subsidy will fail, but because it’s not really reform.
The original budget language certainly seemed promising as it linked the cut in government subsidies to a new market in "ecological services." Farmers could use this new revenue to offset the losses from the subsidy cut (and would also have a new incentive to farm more sustainably). But based on recent comments from Vilsack, that whole angle seems to have gone out the window. Instead, Vilsack appears to have decided that the best course of action is to pit farmers against hungry kids. According to Reuters:
U.S. lawmakers will need to choose between supporting rich farmers or feeding more hungry children amid a slumping economy and a surging deficit, U.S. Agriculture Secretary Tom Vilsack said on Monday.
Vilsack said he already has heard concerns about the Obama administration’s plan to redirect subsidy payments for large farmers into nutrition programs as a way to help end hunger by 2015 and stem the rising tide of childhood obesity.
"We will do our best to frame this discussion in that way, so that people understand: 30 million children, 90,000 farmers," Vilsack told Reuters after speaking to people who work with the nation’s food banks and anti-poverty groups.
"It is a tough choice, but it’s a choice that folks are going to have to make," he said.
Leave aside the fact that the middle of a severe recession isn’t the time to start getting stingy. More importantly, I didn’t see anything in the budget that suggested the subsidy savings would go to nutrition — the stated rationale for the cut was environmental. And it’s surprising that Vilsack would go there in the first place. It’s no accident that anti-hunger programs are legislated within the Farm Bill — the better to balance demands from farm state and urban representatives. It’s true that, as food writer Michael Pollan has long observed, this marriage of convenience helps perpetuate subsidies. But it’s not at all clear that explicitly pitting farmers against hungry children is the way to go.
While a cage match between 30 million children and 90,000 farmers would certainly meet the Hobbsian ideal (nasty, brutish, and short), the legislative process isn’t about whose side enjoys a numerical advantage. The only measures of consequence in Congress are the size, strength, and acumen of your lobbying team — and in that area Big Ag is hard to beat.
That said, Vilsack has found some senators — Tom Harkin and Byron Dorgan in particular — who are very willing to reduce subsidies paid to the largest farmers, though not necessarily willing to adopt Obama’s proposal. And the fact is that whether the limits are by sales, as the president proposed, by income, or by a cap on total subsidies received, this debate still manages to miss the point. As I’ve observed before, the overall regime of supports for commodities remains untouched. Corn will still be king, even if Obama and Vilsack succeed in pushing through this one cut. And in fairness, they are actually proposing a range of small cuts to a number of programs, but it’s all on the margins. There is no real tectonic shifting of priorities.
Some are even suggesting that the direct payments program itself, as a kind of subsidy not considered trade-distorting by the WTO, should be expanded. The cuts should instead come from price- or yield-based subsidies — the ones that are causing such heartburn in our dealings with developing nations.
Meanwhile, reaction in the House to all this has been uniformly negative, which is a replay of the 2008 Farm Bill debate where the Senate tried to set low income limits for subsidies and the House raised them. And without some support in the House, Obama can’t accomplish anything.
That’s what was interesting about his linkage between ecological services and ag subsidies. But it appears that the green carrot is too far off to capture anyone’s imagination. There’s no question that Obama’s proposals are meant to rein in some of the excesses in our farm subsidy programs. But even that may beyond Congress’ capacity to enact.