Time to sow ag reform
Later this month, the Senate Agriculture Committee will take up the 2012 Farm Bill, to extend federal farm programs, as well as food stamps, for another five years.
Based on news reports and politicians’ statements, there is an opportunity for significant reform if a new farm bill is approved before the current bill expires Sept. 30.
There has also been financial sleight of hand designed to ensure that taxpayer money keeps flowing to agribusinesses.
We hope Congress finally does something to rein in subsidies to wealthy farmers and agribusinesses. But given the recent congressional record, we are not optimistic.
The Farm Bill is a complicated mish-mash of programs that — when last authorized in 2008 — cost about $284 billion over four years. This year, with Congress in a cost-cutting mood, funding reductions are expected.
The largest portion of the Farm Bill is funding for food stamps and nutritional programs. In 2010, that funding accounted for 78 percent of all spending under the Farm Bill, according to the American Farmland Trust. Various groups are already lining up to fight over possible cuts in that area.
As a column on the facing page notes, conservation programs are also a key part of the Farm Bill. They help preserve wetlands and wildlife habitat. And, through partnerships with organizations like Mesa Land Trust, they help protect productive farmland from development. Such programs deserve continued funding. While they will also face cuts, they should be in proportion to what is currently spent on them. In 2010, conservation amounted to about 5 percent of the total Farm Bill.
The area ripe for reform is in the commodities and crop insurance programs, which in 2010 cost just over $12 billion, or 15 percent of Farm Bill spending.
Commodities include the notorious price supports that are paid for a handful of crops — corn, wheat, soybeans, cotton and rice are the primary ones. Much of these taxpayer-funded subsidies go to wealthy farmers, agribuisness and people who aren’t really farmers.
Even farm groups and farm-state senators agree it’s time to eliminate these programs, or at least substantially reduce them. One proposal is to allow subsidies only for farmers with annual incomes under $250,000.
But those same groups and senators argue for maintaining the current level of funding for crop insurance. Here’s where the sleight of hand comes in.
Crop insurance was originally designed to aid farmers whose crops were lost or significantly damaged to drought, hail or other natural disasters. However, according to a study last year by an Iowa State University professor, crop insurance has now morphed into what is primarily a taxpayer-funded revenue guarantee for agribusinesses. Some 80 percent of crop insurance payments now go to cover paper losses, when there is no actual crop loss due to weather, the study said.
We in the newspaper business would love a revenue guarantee, supported by taxpayers. Many other businesses would, too. But it wouldn’t be a responsible use of taxpayer dollars.
Real reform — not just cost-shifting — is needed in farm programs. That, unfortunately will be difficult in a hyper-partisan Congress during an election year.