Policy Studies Agriculture

Farm-support reform options in the lead-up to the 2018 farm bill

With the Agricultural Act of 2014 (“farm bill”) set to expire in 2018, Congress will soon begin to negotiate and draft the next iteration of the massive piece of legislation that authorizes federal funding for all farm support and food programs.

In this Congress, lawmakers are faced with a uniquely difficult environment. Last time the farm bill was drafted, net farm income was at a record-high level, whereas now it has been significantly reduced. There is widespread political sentiment that Washington insiders are not doing enough to help Americans who are struggling in rural communities across the country. And this sentiment is sometimes too easily conflated with the need for more farm subsidies

Meanwhile, there are very real spending concerns that lawmakers must address to put our farm support system on a path toward sustainability. Farm-bill spending has surpassed the Congressional Budget Office’s projections at the time the 2014 bill was passed. The two new commodity-support programs it created, the Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) programs, are now projected to cost nearly 250 percent of the original estimates—$31 billion over five years, instead of $12.608 billion. Recognizing this stark reality, President Donald Trump’s Fiscal Year 2018 budget requested a $4.7 billion cut to the U.S. Agriculture Department. This would slash the department’s budget by 21 percent and take aim at crop insurance and commodity-support programs.

Farm lobby groups and farm-state politicians did not take kindly to the president’s calls for spending cuts. In an official statement, American Farm Bureau Federation President Zippy Duvall declared: “Clearly this budget fails agriculture and rural America […] USDA cuts of this magnitude in the current economic cycle would be unwarranted and unwise.” Perhaps heeding such an admonition, House Agriculture Committee Chairman Mike Conaway, R-Texas, promised he would push back against the proposed spending cuts:

As we in Congress get ready to write the budget, we will certainly pay close attention to the president’s recommendations, many of which I suspect will be incorporated into the budget. But, we will also have ideas on what the budget should look like and our priorities will also be taken into account. The bottom line is this is the start of a longer, larger process. It is a proposal, not THE budget.

In the lead-up to the 2018 Farm Bill, Conaway has asserted the next farm bill will only be a “fine-tuning” of existent programs—with the exception of the “cotton portion,” or Stacked Income Protection Plan (STAX)—which Conaway insists will get a complete overhaul to give cotton farmers more support.

While House and Senate Agriculture Committee chairmen may want to push through another bloated farm bill that pads the pockets of wealthy agribusinesses, they would be unwise not to consider reforms to our crop insurance and commodity-support programs that would rein in spending and make our farm-support system more accountable to taxpayers. Fortunately, there is already a menu of reform options that have been proposed in Congress and that could help the committee come closer to the president’s budgetary goals without threatening the safety-net function of our federal farm programs and without putting small, struggling farms in risk of financial ruin.

To better understand what types of farm bill reforms might be feasible, it is worthwhile to examine reform legislation that has been considered in recent congressional sessions and other ideas that have been floated around Capitol Hill. While these proposals all have their strengths and weaknesses—and all are likely to be vigorously opposed by agriculture industry insiders and special-interest groups—from the taxpayer’s perspective, to enact any one of these legislative options would be better than to maintain the status quo. For this reason, they should all be duly considered.

Image by Fotokostic


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