The contradictory Farm Bill

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Last week, on April 12th the House Agriculture Committee released the Agriculture and Nutrition Act of 2018 (H.R. 2), aka the 2018 Farm Bill. Then, yesterday on April 18th the Committee passed the much debated and contested bill on a party line vote. The bill now heads to the House for consideration in May.  

Divisive would be an appropriate adjective for the Farm Bill. The political discussion around subsidies, nutrition support, conservation programs, and crop insurance is wrought with contention. Indeed, the political approach of farm support programs is contradictory to the average American farmer’s political thought.

Growing up as a rural veterinarian’s daughter, I worked with farmers from the Midwest, to Utah, New York, Oregon, and then Washington. The most politically conservative groups were always the farmers and ranchers.

I have often wondered, “How could such a politically conservative group support a government-controlled, central planning policy that reduces their independence?”

I have heard, and even argued in support of, many stances used to defend the Farm Bill including: farming’s inherent risk, the agricultural subsidies of other countries, a lack of free-trade, the position of farmers as price takers, the high operating costs and low margins of farming, the necessity of conservation programs to protect the environment, and the need for beginning farmer loan programs.

Yet, these arguments are only half the story. The current debate over food stamp reform illustrates the divisiveness within the Farm Bill and why there has to be better way to help farmers, rural America, and consumers.

The Federal Farm Bill authorizes 76.5% of its $867 billion in funding to nutrition programs, including the Supplemental Nutrition Assistance Program (SNAP). The Republican members of the House agriculture committee supported a much-needed work requirement for able bodied adults, noting, “It [also] maintains that... great American tradition of self-sufficiency that compels us to work to improve our own stations in life.”

Due to changes within the requirements and overall economic improvement of SNAP participants, the nutrition program saw a $92 billion decrease in funding.

The same push for self-sufficiency was not made for farm spending reform which increased by $7 billion, to $199 billion and makes up 23 percent of funding, for crop insurance, conservation, and commodity programs. The Committee justified the increase in farm spending due to low farm incomes experienced recently.

Despite low market prices, however, farm households continue to be financially better off than the average household. In 2016, the average farm household income was $117,918, which was 42 percent higher than the average non-farm household.

It is contradictory for the House Agriculture Committee to push for nutrition reforms that promote “self-sufficiency” but fail to do the same for America’s farmers, who are already better off.

Senator Chuck Grassley of Iowa noted that the suggested reforms to SNAP are "pretty inconsistent with having loopholes you can drive a truck through where [people] who aren't working on the farm get more money from the federal Treasury."

To their detriment, America’s farmers have become dependent on these farm programs. In 2014, the Congressional Budget Office estimated that commodity payments through ARC and PLC would cost $11.6 billion from 2016 through 2018. However, the last estimate in 2017 was 85 percent higher than the original projection. Crop insurance was no better, with the average amount farmers receiving $2.22 for every dollar paid into the system.

The structure of these programs encourages production beyond market demand and insulates farmers from market signals. These results distort prices and make it harder for farmers to be profitable on their own accord.

Encouraging self-sufficiency within all aspects of the Farm Bill would help remove some of the divisiveness the current version faces.

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