MEDIA ADVISORY: 2014 Farm Bill Didn’t Produce ‘Savings’ for Taxpayers
WASHINGTON (May 19, 2016) – The 2014 farm bill’s projected “savings” in federal spending on agriculture programs have evaporated completely in the two years since the bill was passed, according to a new policy short by R Street Senior Fellow Lori Sanders.
While the farm portion of the bill was expected to save a net $8.6 billion over 10 years, Sanders noted that the bill’s expanded crop insurance provisions ran $1.86 billion over budget in the first year alone. Moreover, the newly created Agriculture Risk Coverage and Price Loss Coverage programs, which were expected to cost $3.76 billion in year one, instead cost the U.S. Department of Agriculture $5.18 billion in their first year. New projections have them running $8.1 billion over budget over the 2016 and 2017 fiscal years.
Sanders notes that, for some members of Congress, even discussing potential cuts to crop insurance subsidies is a non-starter. But for those who support responsible spending on all government programs, this unfortunately has meant an increasingly bloated agriculture budget that goes largely unexamined.
“Crop insurance, ARC and PLC put taxpayers one bad year away from spending unanticipated billions,” Sanders writes. “Even during good years, the supports serve as an expensive way to shift risk from farms to taxpayers. Congress should review these programs objectively, rather than in the heated battle of year-end budget negotiations.”
Sanders also notes a recent R Street analysis which found that, contrary to the agriculture lobby’s exaggerated assertions, a crop insurance premium-support cap of $50,000 – the level considered during debate over the 2014 farm bill – would only affect 9 percent of farms, most of which are earning in excess of $750,000 each year.
According to Sanders, “The federal farm-support system represents an increasingly expensive boondoggle of programs. Despite many attempts at reform, each farm bill is more expensive than the last, and the 2014 bill is no exception. The continued flow of dollars to large, wealthy businesses is unjustifiable and the programs’ fiscal trajectory is unsustainable. Simple reforms must be enacted now, despite the egregiously false claims of those who desire to stay on the current path.”