Top 10 Reasons to Oppose Farm Welfare
August 8, 2012
1. The Farm Bill is reform we can’t afford: The 2012 House Federal Agriculture Reform and Risk Management (FARMM) Act weighs in at a budget-busting $960 billion over the next ten years! For comparison, when ObamaCare passed, we were told it would cost $940 billion (the price tag later went way higher). The Troubled Asset Relief Program, or TARP, cost $700 billion in initial outlays.
2. Congress can’t keep spending money we don’t have: Our economy is staggering under a $1.2 trillion federal deficit and $16 trillion in federal debt. We can’t keep wasting taxpayer dollars on unnecessary programs like the Farm Bill. Congress should be shrinking government spending, not growing it.
3. The farm economy remains robust: Thanks to high commodity prices and bigger crop yields, the financial outlook for American farmers has been improving. The Department of Agriculture reports that productivity has soared in the past 60 years. Since the 1990s, farm income has trended upward at a much faster pace than for other U.S. households. In 2010, the average annual income for a farming household was $84,440, well above the national mean of $64,000. The current debt-to-asset ratio in the agriculture sector is less than 9 percent and fewer than one in 200 farms fail each year.
4. This isn’t the spending cut we were promised: The media and Big Ag proponents have been touting the new bill as a major cut, but this legislation is 60% BIGGER than the Farm Bill that passed in 2008.
5. The farm bill is full of new entitlements for Big Ag: The new farm bill does cut the indefensible direct payment program, where farmers received a check from taxpayers regardless of market conditions, but it is replaced by “shallow-loss” crop insurance programs that have the potential to cost billions more for taxpayers should prices fall even slightly to their 15-year averages.
6. There’s far more “Food Stamp” than “farm” in the Farm Bill: Almost 80% of the funds in the bill go toward the Supplemental Nutrition Assistance Program, or SNAP. This makes for a strangely hypocritical bill, whereby at the same time farm policies try to prop-up food prices, SNAP tries to make food more affordable for low-income Americans. The truth is that without buying votes from both sides of the aisle through taxpayer-funded handouts, the package would never pass. Congress should evaluate both parts of the bill on their individual merits and embrace cost-saving policies like block-granting Food Stamps, a common-sense reform that has had great success in other welfare programs.
7. The Farm Bill is full of hidden costs to our economy: The taxpayer-funded subsidies and other price support programs in the Farm Bill distort free markets and increase the price of food. Federally funded crop insurance programs create a perverse incentive to farm on land that shouldn’t be cultivated and drive up prices, hurting small farmers in the process.
8. We need to repeal the sugar program: The House Farm Bill preserves the nefarious sugar cartel that costs U.S. consumers $1.9 billion a year thanks to trade restrictions and price supports. Fully 42% of sugar subsidies go to only 1% of sugar growers, and for every one sugar producing job saved, three are lost by industries that use sugar for their products. The result is lost economic activity and employment opportunities, both of which end up flowing to other countries.
9. The Farm Bill is full of costly special interest carve-outs: Just two examples include a duplicative catfish inspection program costing taxpayers $44 million and a cotton subsidy that violates free trade agreements and for which taxpayers pay Brazilian cotton growers $150 million per year. Want more? How about a Soviet-style dairy price support program that costs taxpayers billions of dollars, stifles innovation, transfers wealth from consumers to certain dairy businesses and hurts downstream producers. Then there are all the programs for mustard seeds, garbanzo beans, lentils, popcorn, rice, and peanuts. The list goes on and on.
10. Taxpayers assume the most risk: Taxpayers currently cover about 60% of the costs for farmers’ crop insurance. That means that taxpayers assume much of the risk for crops planted in unsuitable areas or for poor business choices. Congress has created a moral hazard by eliminating the incentive for following prudent farming and other cost mitigation practices like crop diversification.
We need to tell Congress to stop letting Big Ag feed at the taxpayers' trough. Go here to sign the petition and urge your lawmakers to oppose H.R. 6083, the House Farm Bill!
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