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A Better Farm Bill

September 27, 2007 - by Donny Shaw

The farm bill that the House of Representatives passed in July was not all that it was cracked up to be. Many were hoping that the newly-elected Democrats would pass a better farm bill that attacked the policies that have lead to widespread obesity and poor health in America. But instead of gutting the central, most egregious provisions of the bill, they left them untouched and did some minor tweaking around the edges. Leading House Democrats insisted on calling their bill “reform.”

For years, the farm bill has provided billions of dollars in direct subsidies for big producers of soy, corn, wheat, and rice, driving down the prices of the junk food that is made from these crops while keeping the prices of fruits and vegetables high. House Democrats, fearing the political fallout of pitting freshman Democrats from relatively-red farm states against their farmer constituents, decided to leave these payments unaltered.

But the House is only half of Congress. The Senate has yet to pass their version of the farm bill, and once they do, the two bills will still have to be combined into one by a conference committee and voted on once again by the separate chambers.

Today, Senator Tom Harkin (D-IA), the chairman of the Senate Agriculture Committee, released his proposal, and while it may not be revolutionary, it is a step in a new direction.

Harkin’s proposal would cut the direct payment subsidies by $4.5 billion, or about 12.5 percent, over five years. These subsidies originated in the New Deal as a way to increase crop values by reducing surpluses, but over the years they have flip-flopped into a payment system base on past production levels — the more you produce, the more federal money you get.

And if you are a farmer who farms in a climate zone that is not hospitable to the select group of subsidized crops, you are out of luck. While rolling back these unbalanced payments, Harkin’s proposal would also bring the bill back somewhat to its original intent of providing economic security for struggling farmers by putting $5 billion into a permanent disaster-relief fund. This money would be reliably available to farmers, regardless of what crops they grow, when their yields are down due to drought and other weather-related disasters. Currently, if you are a farmer growing unsubsidized crops, you have to apply to Congress for disaster relief on a case-by-case basis and there is no way to be certain that they will help you.

Harkin’s proposal would also level the playing field by transferring $4 billion from the direct subsidies cut into the $17 billion conservation title of the bill. These funds are available across the board in order to encourage farmers to farm responsibly and to help them deal with environmental challenges on their land. Click here for a rundown of the conservation programs from the 2002 farm bill that would be expanded by Harkin’s proposal.

A new study out today from a former USDA economist explains how beefing up the conservation title will help level the playing field for farmers of unsubsidized crops. The study assumes that the title will get an extra $6 billion, and while Harking is proposing $4 billion, it is possible that that amount will be raised by an amendment on the Senate floor. “Thirty-seven out of 50 states would receive between about $1 million and $33 million more in annual federal support by shifting “direct” subsidy payments to provide $6 billion more in funding for voluntary USDA conservation programs than they would receive if the current Farm Bill were extended,” the study concluded. The 37 states referred to in the study, entitled “Fairness on the Farm,” are the ones with a high percentage of farmers growing unsubsidized crops. As it explains, “conservation dollars are distributed more equitably” than direct payments:

>Currently, six out of 10 farmers grow fruits, nuts, vegetables and other crops that are ineligible for direct subsidy payments and the largest 10 percent of direct payment recipients collect 64 percent of all payments. Under current farm policies, half of all farm program spending goes to just seven states.
>“Our farm subsidies are broken,” said Tim Male, senior scientist for Environmental Defense. “The most expensive subsidies – direct payment s – cost tens of billions of dollars, provide payments at the wrong times, and provide no help to most farmers. Greater funding for conservation programs would help more farmers and produce enormous public benefits.”
>USDA data shows that two out of three farmers are rejected when they offer to share the cost of meeting our environmental challenges because of our misplaced spending priorities.

If Harkin can get his bill approved by the Senate (he still has to wrestle funds out Budget Chairman Kent Conrad (D-ND), who favors a more status quo approach), it is possible that senate conference negotiators can keep the final bill pretty close to his proposal. That way a better farm bill can hopefully be passed without hurting vulnerable farm-state Democrats. The House bill passed with votes to spare and lowering crop subsidies, while losing farm-state freshman, will likely gain some Republican support for the bill. But Harkin has yet to release his proposal’s specifics, so we’ll have to wait to make any judgments on its political plausibility.

This Larry Craig (R-ID) spoof explains the farm bill issue pretty well:

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