The gravy train; Agricultural subsidies need reform
January 22, 2014 —
With any luck, the United States may get a new farm bill this year. Already a year overdue, however, the bill is facing some 11th-hour obstacles as a committee of congressional negotiators wrestles to reconcile the differences between the two versions passed by the House and Senate in 2013.
There are reportedly two major sticking points: what to do about milk pricing and what to do about farm subsidies to some of America’s wealthiest farmers. (For some thoughts about reforming USDA milk pricing policy, see former dairyman Nate Wilson’s My View at the right.)
We find the standoff over reforming payment limits for farm commodity subsidies to be especially infuriating because both the House and Senate versions included identical dollar limits on subsidies per farm per year. Yet now, according to the National Sustainable Agriculture Coalition (NSAC), “A small but dedicated group of legislators, answering to a small but dedicated group of the country’s largest and wealthiest farmland owners, want to save the loopholes and thereby continue an open-ended entitlement to unlimited subsidies” (sustainableagriculture.net/blog/farm-bill-needs-payment-reform/.) According to the Congressional Budget Office, the savings that could be realized if the conference committee were to accept the cap on commodity payments of $125,000 per individual and $250,000 per married couple per year would be an estimated $170 million annually.
Also on the table are subsidies to help farmers pay insurance premiums, which would be reduced for farmers with adjusted gross incomes of $750,000—this under an amendment to the bill.
In addition to setting dollar limits, both House and Senate bills also closed loopholes (big enough to drive a tractor through) in the rules about who is “actively engaged in farming.” The loopholes have allowed an unlimited number of managers of general partnership farms to receive subsidy payments even if they have little to no involvement in actual farming or direct farm management. According to a report by the Government Accountability Office released last fall, of the $1.5 billion in farm subsidies paid in 2012 to people who were supposedly “actively engaged in farming,” nearly half ($736 million) went to individuals who didn’t actually farm, but went instead to business entities constructed to maximize subsidies. Further, researchers for an organization called the Environmental Working Group found that “residents of America’s 54 largest cities collected more than $24 million in direct payment farm subsidies in 2012.” We believe that this $736,000 would be better spent helping farmers who are really struggling.