Farms and trade can grow together if Congress does the farm bill right
Estimated to cost at least $867 billion over the next 10 years, the farm bill is a disaster for taxpayers, especially after the budget-busting omnibus package that passed earlier this spring. While Conaway and House leadership are offering certain welfare reform measures to entice conservatives to support the legislation, fiscal conservatives should demand more.
About 80 percent of the farm bill’s spending is for the Supplemental Nutrition Assistance Program, or the federal food stamps program. As currently drafted, the bill would require able-bodied SNAP recipients to work or participate in work training for at least 20 hours a week. But if Congress is really serious about welfare reform, it must go further and target the corporate welfare that plagues the rest of the bill and damages our ability expand market access abroad.
In fact, it is estimated that between 1995 and 2014, the top 1 percent of subsidy recipients received more than 25 percent of all payments. Meanwhile, a 2011 Government Accountability Office study found that less than 4 percent of all farmers actually participate in the crop insurance program. In other words, the program isn’t providing a true farm safety net to those in need.
Thankfully, Congress has sound reform options available. Bipartisan legislation introduced in the House by Reps. Ron Kind, D-Wis., and Jim Sensenbrenner, R-Wis., and in the Senate by Sens. Jeff Flake, R-Ariz., and Jeanne Shaheen, D-N.H., would institute commonsense reforms to the program’s misguided subsidies. Their bill, the Assisting Family Farmers through Insurance Reform Measures Act would means test the crop insurance program such that any person or legal entity with an adjusted gross income greater than $250,000 would be ineligible to receive premium support.
Likewise, the bill would cap at $40,000 per year the amount that any one farmer or legal entity can receive in premium subsidies. Including the AFFIRM Act or other sensible limits into the farm bill should be a top priority for conservatives who want to impose fiscal discipline and be consistent about the need to address bloated welfare programs.
Fiscal conservatives in Congress also should take aim at the outdated sugar program, which is a convoluted mix of domestic subsidies and import restrictions designed to shield competition and prop up sugar prices. It is estimated that the sugar program pushes up the price of sugar in the United States to about twice that of the rest of the world. The status quo may help certain domestic sugar producers, but higher prices hurt families, bakeries and confectioneries that use sugar.
The Sugar Policy Modernization Act, floated by Rep. Virginia Foxx, R-N.C., and Sens. Pat Toomey, R-Pa., and Jeanne Shaheen, D-N.H., would move the sugar program in a more market-oriented direction by ensuring there is no net cost for taxpayers, repealing certain domestic supply restrictions and paving the way for more imported sugar to make its way to willing domestic buyers. Including the Sugar Policy Modernization Act into the farm bill is vital.
Reforming these programs would have the added benefit of paving the way for expanded market access abroad. From the ill-advised decision to withdraw from the Trans-Pacific Partnership to unnecessary saber-rattling about withdrawing from the North American Free Trade Agreement to the threat of foreign retaliation against agriculture exports, American farmers are rightly anxious about misguided trade policy coming from the White House. Expanded market access is absolutely vital to the domestic agriculture industry. When the wealthiest country in the world overly subsidizes agriculture and restricts imports, it hurts our ability to open foreign markets for American products abroad. Paring back our subsidy regime and lifting import restrictions is necessary to jump-start a stalled trade agenda, which is what would help farmers the most.
Fiscal conservatives in Congress will soon face an inflection point, as the House begins debate on the 2018 iteration of the farm bill. They can pay lip service to fiscal sanity and the need for welfare reform or they can do the tough but necessary work of making them reality.
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