Congress Should Fix Wasteful Agriculture Policy in Farm Bill

COMMENTARY Agriculture

Congress Should Fix Wasteful Agriculture Policy in Farm Bill

Jan 29th, 2019 3 min read
COMMENTARY BY
Kay Coles James

President of The Heritage Foundation

James is a leader in government, academia and the conservative movement.

Key Takeaways

Agricultural subsidies that allegedly help farmers manage risk cost taxpayers about $15 billion a year, even though most farmers receive little to no subsidies.

As the successful 1996 welfare reforms showed, work requirements help our welfare system achieve its goal of reducing poverty especially among children.

It is long past time that Congress address the egregious waste in the farm subsidy system.

The biggest agricultural disaster this year is not some sort of crop failure. It is the farm bill expected to be served up soon in Congress. House and Senate negotiators have been hammering out a “compromise” bill for weeks. Unfortunately, those familiar with the discussions report that the final bill will likely fail on three key counts. First, it will not rein in excessive farm subsidy programs. Second, it will not reform the food stamp program in any meaningful way. Third, it will not to repeal the federal rule that allows the government to regulate almost any waterway in America, including “waters” that are dry land practically every day of the year.

Agricultural subsidies that allegedly help farmers manage risk cost taxpayers about $15 billion a year, even though most farmers receive little to no subsidies. Most farmers generally receive aid only when they actually need assistance due to a disaster of some kind. But the bulk of the real money goes elsewhere to a small number of agricultural producers growing a small number of commodities. According to the Congressional Research Service, an astonishing 94 percent of farm program support goes to just six commodities. Those are corn, cotton, peanuts, rice, soybeans, and wheat. These commodities account for just 28 percent of total farm receipts. But these favored farms that produce them rake in billions of dollars through multiple subsidy programs.

Though often called “safety net” programs, most of the money is used primarily to help the recipients meet revenue targets, not to deal with actual crop losses. This is not a safety net. It is a massive social welfare program. Despite myths to the contrary, this inappropriate corporate welfare goes primarily to wealthy large agricultural producers, not to small family farms. There are organizations across the ideological spectrum that have been trying to promote modest reforms to this out of control handout system. Unfortunately, House and Senate leaders created a very closed process when debating their farm bills over the years, ensuring that any common sense amendments could not get enacted.

The negotiated farm bill is expected not just to reject important and widely supported reforms, it may actually make things worse. Should farm subsidies go to individuals who, by any reasonable definition, are not farmers? Of course not. The Senate farm bill would have tried to close a loophole that makes such an abuse possible. The compromise bill, however, is thought to adopt the House language that would actually expand this loophole, making it possible for more family members not in farming to receive subsidies, specifically cousins, nephews, and nieces.

As for addressing food stamps, the House had added a provision to strengthen work requirements for eligibility. Under its proposal, more beneficiaries who are capable of working would have been required to either work or prepare to get a job as a condition of continuing in the program. It seems reasonable, and after all, unemployment remains at its lowest point in nearly 50 years. Yet while unemployment is at 3.7 percent, the share of Americans still on food stamps hovers at 13 percent.

As the successful 1996 welfare reforms showed, work requirements help our welfare system achieve its goal of reducing poverty especially among children. Most Americans know this instinctively. Indeed, 92 percent support work requirements in the welfare system. Unfortunately, most members of the committee seem to have lost sight of this fact. They have reportedly dropped the work requirements passed by the House.

Perhaps the most inexplicable failure is resistance in the committee to repealing the federal clean water rule. This Obama era regulation declared that the government had the authority to regulate virtually every “water” you can think of, including even some types of manmade ditches. As you can imagine, this significant expansion of regulatory power has made it more difficult for real farmers to engage in normal farming activities.

The Trump administration is trying to get rid of this rule through the regulatory process, but legislation is needed to remove any obstacles in doing so. Legislation will also help ensure that such overreach does not occur again. Surely there is no vehicle more fitting than the farm bill to address what is arguably the biggest regulatory obstacle facing farmers. But the conferees seem to prefer punting to fixing the problem. Their deal reportedly includes no provision to eliminate the clean water rule.

As I write this, the final bill has not been released by the committee, so there is still a chance that the members will see their way to doing a lot better by farmers and by taxpayers. It is long past time that Congress address the egregious waste in the farm subsidy system, improve the efficacy of the food stamp program, and free farmers from having routine land use decisions be second guessed by Washington bureaucrats.

If the current Congress is unable work these broadly supported sensible reforms into the farm bill this year, lawmakers would do better to do what they did last year by simply extending the existing farm bill for another year. At least that would give the new Congress a chance to get reform right next year, instead of locking in bad policy for the next five years.

This piece originally appeared in The Hill on 12/3/18