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Issue Brief #4062 on Agriculture

October 8, 2013

A Comparison of the House and Senate Farm Bills

By and

Congress continues to treat agriculture as if it were 1933 instead of 2013. Agriculture is a cutting-edge sector of the economy that continues to innovate and produce more food with fewer resources.

Yet, every five years when the farm bill is up for renewal, many legislators, including those who claim to be pro–free market and limited government, push a farm bill that is a model of central planning. Agriculture policy continues to emphasize price supports, supply restrictions, import quotas, government-subsidized international marketing programs for major corporations, and much more. Quite simply, almost any subsidy that can be dreamed of exists in one form or another in the current farm bill.

The farm bill should not be a “holiday” for legislators from free market and limited government principles. Through sound free market reforms, farmers will benefit by having government out of their way so they can have the freedom to make decisions based on market conditions. They will be able to use their land as they see fit and not be harmed by government incentives and controls. Consumers will have choices that best reflect demand and enjoy prices that reflect open competition, not artificial constraints on supply.

Further, food stamps should be reformed to promote self-sufficiency among able-bodied adults. Adults who are able should be required to work, prepare for work, or at least look for work in exchange for receiving food stamp assistance. This principle of reciprocal obligation does not currently exist in the program. Additionally, loopholes that have led to an increase in the food stamp rolls should be closed.

Achieving Reform

The House and Senate are expected to meet soon to work out differences in their farm bills—or more appropriately titled, their food stamp bills. The following table compares the bills, listing some of the important provisions along with recommended reforms for a sound farm bill. To achieve any substantive reform, agriculture policy and food stamps must be separated into different bills now and in the future. For political reasons alone, food stamps and agriculture policy have been combined into farm bills. By getting urban legislators who tend to support food stamps and rural legislators who tend to support farm programs into a coalition, Congress has enacted farm bills without proper consideration of these programs on their merits. Real reform will only be achieved when Congress takes the time to address these issues independently.

Daren Bakst is a Research Fellow in Agricultural Policy in the Thomas A. Roe Institute for Economic Policy Studies and Rachel Sheffield is a Policy Analyst in the Richard and Helen DeVos Center for Religion and Civil Society at The Heritage Foundation.

Show references in this report

[1] The latest House bill is the Federal Agriculture Reform and Risk Management Act of 2013, H.R. 2642, 113th Cong., 1st Session, September 28, 2013. The latest Senate bill is the Agriculture Reform, Food, and Jobs Act of 2013, S. 954, 113th Cong., 1st Session, as passed by the Senate on June 10, 2013.

[2] See “Requirements for Farm Bill Reform in the House,” Heritage Foundation Factsheet No. 123, July 9, 2013, http://www.heritage.org/research/factsheets/2013/07/requirements-for-farm-bill-reform-in-the-house.

[3] See, e.g., H.R. 2642, §4024, one provision that addresses the three-year authorization. See also “H.R. 3102, Nutrition Reform and Work Opportunity Act of 2013,” Congressional Budget Office, September 16, 2013, http://www.cbo.gov/publication/44583 (accessed October 2, 2013).

[4] For the sugar program (H.R. 2642, §1301), the permanent law is created by covering “each succeeding crop year” as opposed to setting a final year. Similar language exists for shallow loss (revenue loss coverage) and reference price programs (price loss coverage) in §1107 of the bill.  

[5] Dan Piller, “Farm Bureau Adopts Iowa Policy on Direct Payments,” DesMoinesRegister.com, January 11, 2012, http://blogs.desmoinesregister.com/dmr/index.php/2012/01/11/farm-bureau-adopts-iowa-policy-on-direct-payments/article (accessed October 2, 2013).

[6] U.S. Government Accountability Office, Crop Insurance: Savings Would Result from Program Changes and Greater Use of Data Mining, GAO-12-256, March 2012, http://www.gao.gov/assets/590/589305.pdf (accessed October 2, 2013).

[7] Ibid.

[8] For a detailed discussion of crop insurance, shallow loss, and reference price programs in the bills, see Daren Bakst, “Proposed New Farm Programs: Costly and Risky for Taxpayers,” Heritage Foundation Backgrounder No. 2815, June 14, 2013, http://www.heritage.org/research/reports/2013/06/proposed-new-farm-programs-costly-and-risky-for-taxpayers.

[9] Daren Bakst and Diane Katz, “A Farm Bill Primer: 10 Things You Should Know About the Farm Bill, Heritage Foundation Backgrounder, May 14, 2013, http://www.heritage.org/research/reports/2013/05/a-farm-bill-primer-10-things-you-should-know-about-the-farm-bill.

[10] American Farm Bureau Federation, letter to the Committee on Agriculture, Nutrition and Forestry and the Committee on Agriculture, October 17, 2011, http://farmpolicy.com/wp-content/uploads/2011/10/101711_FarmBureau_FarmBillShallowLoss.pdf (accessed October 2, 2013). This letter was written when the discussion regarding shallow loss revenue coverage was at 90 percent. While the numbers have been reduced slightly, the same general concerns about shallow loss highlighted in this paper would still apply. See also Jim Wiesemeyer, “Farm Bureau Sends Letter to Ag Panel Members Re: ‘Shallow Losses,’” AgWeb, October 18, 2011, http://www.agweb.com/article/farm_bureau_sends_letter_to_ag_panel_members_re_shallow_losses_/ (accessed October 2, 2013).

[11] In the House bill, farmers have a choice between the shallow loss and reference price programs.

[12] To see how the reference prices work and the generosity of the House and Senate bills, see Daren Bakst, “Proposed New Farm Programs: Costly and Risky for Taxpayers,” Heritage Foundation Backgrounder No. 2815, June 14, 2013, http://www.heritage.org/research/reports/2013/06/proposed-new-farm-programs-costly-and-risky-for-taxpayers.

[13] Remy Jurenas, “Sugar Program: The Basics,” Congressional Research Service, August 19, 2013, http://nationalaglawcenter.org/wp-content/uploads/assets/crs/R42535.pdf (accessed October 2, 2013).

[14] “Employment Changes in U.S. Food Manufacturing: The Impact of Sugar Prices,” International Trade Administration, United States Department of Commerce, February 2006, http://www.ita.doc.gov/media/Publications/abstract/sugar2006desc.html (accessed October 1, 2013).

[15] For related information, see Diane Katz, “Dairy Security Act Would Milk Taxpayers,” Heritage Foundation WebMemo No. 3399, October 21, 2011, http://www.heritage.org/research/reports/2011/10/dairy-security-act-would-milk-taxpayers.

[16] Daren Bakst, “Farmers and Property Rights: Conservation Compliance Should Not Be Connected to Crop Insurance,” Heritage Foundation Issue Brief No. 3946, May 22, 2013, http://www.heritage.org/research/reports/2013/05/farmers-and-property-rights-conservation-compliance-should-not-be-connected-to-crop-insurance.

[17] The alleged motivation to tie crop insurance to conservation compliance is the inevitable repeal of direct payments. One of the incentives to get farmers to participate in conservation compliance is through direct payments. Out of the total number of farms (696,000 farms) that participated in conservation compliance, about 54 percent would still be subject to conservation compliance requirements because they received conservation payments. See Bakst, “Farmers and Property Rights.”

[18] Senator Tom Coburn, “Treasure Map: The Market Access Program’s Bounty of Waste, Loot, and Spoils Plundered from Taxpayers,” June 2012, http://www.coburn.senate.gov/public/index.cfm?a=Files.Serve&File_id=5c2568d4-ae96-40bc-b3d8-19e7a259f749 (accessed October 2, 2013).

[19] Ibid.

[20] U.S. Government Accountability Office, Responsibility for Inspecting Catfish Should Not Be Assigned to USDA, GAO-12-411, May 10, 2012, http://www.gao.gov/products/GAO-12-411 (accessed October 2, 2013).

[21] U.S. Government Accountability Office, 2013 Annual Report: Actions Needed to Reduce Fragmentation, Overlap, and Duplication and Achieve Other Financial Benefits, GAO-13-279, p. 34, April 2013, http://www.gao.gov/assets/660/653604.pdf (accessed October 2, 2013).

[22] Daren Bakst, “Food Safety Rules: Rushed Deadlines Will Lead to Disaster,” Heritage Foundation Issue Brief No. 4018, August 20, 2013, http://www.heritage.org/research/reports/2013/08/food-safety-rules-rushed-deadlines-will-lead-to-disaster.

[23] U.S. Food and Drug Administration, “FDA Food Safety Modernization Act (FSMA),” U.S. Department of Health and Human Services, http://www.fda.gov/Food/GuidanceRegulation/FSMA/default.htm (accessed October 2, 2013).

[24] There would a mandatory assessment (i.e., tax) of 15 cents on fresh-cut Christmas trees, which could eventually rise to 20 cents per tree; Daren Bakst, “Obama’s Christmas Tree Tax Is Back,” June 4, 2013, http://blog.heritage.org/2013/06/04/obamas-christmas-tree-tax-is-back/.  

[25] See Rachel Sheffield, “How to Reform Food Stamps,” Heritage Foundation Issue Brief No. 4045, September 12, 2013, http://www.heritage.org/research/reports/2013/09/how-to-reform-food-stamps.

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