NTU urges all Senators to vote “NO” on cloture on the motion to proceed to S. 3240, the Agriculture Reform, Food, and Jobs Act of 2012, or Farm Bill. As consideration of the Farm Bill begins, Senators should be aware that although there have been some reforms such as the elimination of direct payments, the legislation is still packed with fiscally volatile entitlements and favors to agribusiness.
Among the biggest handouts to a sector with well-above-average incomes is the new “Shallow Loss” Program. Designed to be a safety net, this scheme locks in returns on commodities at record-high prices, hedging against most potential revenue losses due to economic fluctuations. When the current debt-to-asset ratio in the agriculture sector is less than 9 percent and fewer than one in 200 farms fail per year, it is hard to see why taxpayers should be put on the hook for what might be upwards of $7.4 billion – if commodities were to return to price averages reflecting the past 15 years. It is difficult to conceive of any other industry that could so extensively employ taxpayer funds to lock in guaranteed profits while continuing to hurt our trading partners and distorting markets, all in the name of “reform.”
Unfortunately, the new Shallow Loss Program is but one troubling element behind the Farm Bill’s massive $969 billion, nine-year price tag. Three-quarters of the legislation’s funding is devoted to social welfare-type initiatives like the Supplemental Nutrition Program (SNAP), which duplicates other USDA efforts and is itself in serious need of real reform. The bill is also packed with giveaways to the green energy and ethanol industries, with $193 million for the Biomass Crop Assistance Program and another $241 million for the Rural Energy for America Program.
Taken as a whole, this legislation is far from the comprehensive, market-based reforms that will allow the agricultural sector to flourish, give consumers a fair shake, and protect taxpayers from excessive spending. Instead, it is a blueprint that creates continued dependency on the federal government and regular infusions of taxpayer funds, pushes up land and food prices, and hurts the very same small farmers proponents of the bill claim to be helping.
Roll call votes on S. 3240 will be significantly weighted in our annual Rating of Congress and a “NO” vote will be considered the pro-taxpayer position.
If you have any questions, please contact NTU Federal Affairs Manager Nan Swift at (703) 683-5700