The Honorable Chuck GrassleyUnited States Senate135 Hart Senate Office BuildingWashington, DC 20510
Dear Senator Grassley:
On behalf of the 362,000 members of the National Taxpayers Union (NTU), I write in support of your “Rural America Preservation Act of 2012,” which would cap annual per-farm commodity subsidy payments at $250,000 and close loopholes that misdirect funds. At a time when agriculture profits are rising and the national debt is growing, limiting expenditures and ensuring that taxpayer money gets put to its most effective use is an especially high priority.
Farm payments are long overdue for serious reform. As it stands now, only 10 percent of farmers receive 70 percent of farm program benefits. To make matters worse, the Department of Agriculture does little to ensure that certain payments go to those actively involved in farming, providing further evidence that the overall scope of the program is a far cry from earlier intentions to save the “family farm.” This bill not only caps current spending, but it also improves the standards used by the Department of Agriculture to determine beneficiaries.
American farmers are enjoying record profits thanks to high commodity prices and higher yields. The Department of Agriculture reports that though farming inputs have stayed relatively stable since 1948, productivity has soared. The net income of farmers nationwide last year was almost $98 billion, and corn alone raked in $76 billion. 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 around $64,000.
Critics of reform are quick to point out that sudden market fluctuations and natural disasters can deal a blow to farmers. This is quite true; yet, other participants in our economy – from product manufacturers dependent on foreign supply chains to shippers dependent on weather conditions – are not immune to losses either. Few of these lines of business are afforded special government protection at the same level of agriculture. Those that do receive such protections ought to be encouraged to embrace reforms stressing more private risk-management options. Despite its inherent difficulty, farming remains profitable and is expected to be well into the future. In fact, farmers enjoy a failure rate of only one-sixth that of other businesses. The bill’s payment caps and structural reforms are thus all the more critical for taxpayers.
When looking for ways to stop the out of control spending in Washington, it is important that all options are on the table. Enacting The Rural America Preservation Act of 2012 will save $1.5 billion over 10 years and is a major step toward a more comprehensive (and long-overdue) revision of our agriculture policies. NTU urges all Senators to cosponsor your legislation and to work toward its enactment in this Congress.
Sincerely,
Nan SwiftFederal Affairs Manager