WASHINGTON (May 13, 2013) – The R Street Institute today noted the draft Farm Bill the Senate Agriculture Committee will begin marking up tomorrow once again fails to enact substantial reforms to the expensive and elaborate system of agricultural subsidies.
While the committee bill eliminates the nonsensical “direct payments” program, it uses virtually all of the savings associated with it to dramatically expand subsidies in other areas. It fails to include common sense taxpayer protections in crop insurance or alterations to antiquated central planning in dairy and sugar markets, among others.
Additionally, the new bill raises the target prices for rice and peanuts by 26 percent and 6 percent, respectively, giving numerous Southern farmers even higher levels of guaranteed income.
“The need for serious agriculture policy reform has never been clearer,” said R Street Senior Fellow Andrew Moylan. “Agricultural producers are receiving near-record prices for their goods and farmers’ household incomes are near record levels, even as our nation faces tremendous fiscal challenges. Instead of identifying the low-hanging fruit for savings, the Senate Agriculture Committee has played politics as usual and avoided substantial reform.”
The bill also fails to carry over most of the reasonable restrictions that historically helped to rein in the worst aspects of direct payments to the newly expanded crop insurance programs: full transparency on what entities receive subsidies and in what amounts and a limit of $40,000 on subsidies to prevent large agribusinesses from raking in, in some cases, over $1 million in crop insurance premium support alone.
“Taxpayers are suffering under high unemployment, stagnant wages,” Moylan said. “Any new Farm Bill should ensure that Americans aren’t subsidizing the rich, encouraging risky behavior and harming the environment with their tax dollars. This draft fails that test.”