Congress needs to stop meddling in farming. As legislators start their work on the next farm bill, they should focus on removing federal intervention in agriculture.
This means providing a true safety net, not an out-of-control farm handout system. It also means reducing the crushing federal regulatory burden on farmers.
A true safety net wouldn’t channel 94 percent of farm program support to just six commodities — corn, cotton, peanuts, rice, soybeans, and wheat — that represent only 28 percent of agricultural production. Yet, according to the Congressional Research Service, this is exactly what happened from 2014-16.
If the vast majority of commodities can be produced profitably, with little to no government assistance, then so, too, can these crops.
Former American Farm Bureau Federation president Bob Stallman seems to agree. The Washington Post reports: “Stallman dismisses outright the claim that farmers couldn’t survive without subsidy money. ‘Why does the livestock industry survive without subsidies?’ he asks. ‘Why does the specialty crop [fruit and vegetable] industry survive?’”
This doesn’t mean we need to jettison all farm subsidies today. But lawmakers should embrace major reforms that can help move us away from subsidies in the next farm bill.
For example, a true safety net wouldn’t pay farmers twice for the same losses. Farmers should be required to choose between the two largest commodity programs: Agricultural Risk Coverage/Price Loss Coverage programs or federal crop insurance.
Nor should there be artificial limits on agricultural sales, such as the marketing allotments in the federal sugar program. These cartel-like controls limit how much of a commodity can be sold, driving up food prices. Naturally, these supply controls hurt the poor the most.
Former U.S. Senator and Senate Agriculture Committee chairman Richard Lugar of Indiana explained in 2011, "Every time Hoosiers see sugar listed as a food ingredient, they should know that they are paying more than they need to because of the current federal sugar program. ... [G]overnment intervention to keep prices high for a small group of powerful farming interests violates the free market concept of the American economy."
A true safety net would respect the free market and not view it as something farmers need to be protected against. Unfortunately, current subsidies insulate some agricultural producers from competing in the marketplace.
Farmers also don’t need to be protected from “shallow losses” (i.e. minor losses). Even if one thinks farmers need protection from some level of risk, this doesn’t mean taxpayers should protect them from almost all risk. Certainly, taxpayers shouldn’t be required to provide handouts when farmers experience minor dips in expected revenue.
A true safety net also wouldn’t impose nearly unlimited exposure to taxpayers. In the last farm bill, the House overwhelmingly passed a cap on the costs of the Agricultural Risk Coverage and Price Loss Coverage programs. Unfortunately, this cap was removed when the House and Senate came up with their final farm bill.
That egregious mistake is costing taxpayers about $13 billion, based on the higher-than-projected costs for the first five years of these programs. A similar mistake should not be made this time; a cap needs to become law.
The safety net is only part of the massive federal government intervention.
Most farmers don’t receive subsidies. However, almost every farmer, regardless of size or region, is being harmed by federal regulations. The next farm bill provides a unique opportunity to address the excessive overreach by agencies such as the Environmental Protection Agency.
For example, any new farm bill should ensure that the Obama Administration’s “waters of the United States” rule — which seeks to regulate almost every water imaginable, including what most people would consider to be dry land — never goes into effect. It also should properly define what waters are in fact covered under the Clean Water Act. Farmers and ranchers need to have some predictability and their property rights need to be respected.
It should also address problems with the Endangered Species Act. Most important, it should provide compensation to farmers, ranchers, and other property owners for restrictions placed on the use of their land.
As farmers and ranchers know all too well, these regulatory reforms would merely scratch the surface of what needs to be done when it comes to reining in excessive environmental regulations.
Congress has a real chance to develop a revolutionary farm bill — one that respects our nation’s farmers and ranchers, provides a proper safety net, and gets the federal government out of the way. This next farm bill can’t be business as usual. Anything short of major reforms would be a disservice to farmers, taxpayers, and consumers.
This piece originally appeared in The Des Moines Register