The Senate has passed the Farm Bill which includes $8 billion of cuts to food stamps and $7 billion of increases to agribusiness. President Obama has said he will sign it into law. Game over.
The talking points on the bill are that it changes direct subsidies to farmers with increased crop insurance which is supposed to be some kind of progress. In reality that just means the government is taking on more risk for agribusiness by taking on bad weather risk. Another reason for farmers to stay out of the climate change debate – the government will cover damages.
So the new Farm Bill doesn’t end subsidies to agribusiness it just hides them.
Federally subsidized crop insurance programs pay almost two-thirds of a farmer’s premium, as well as most of the insurance claims, guaranteeing revenue regardless of crop failure or even price swings. The current farm bill expands the program to cost the government $90 billion over ten years, an increase of $7 billion. But that’s just an estimate, which may be low. Farmers received $16 billion in crop insurance payments alone during last year’s Midwest drought, most of it paid by the federal government. Despite the poor conditions, net agriculture income increased 15 percent last year, a tribute to the relative pointlessness of the subsidies.
For those unaware we have been in the middle of a massive commodities boom the last few years. Partly due to investors fleeing mortgage securities and partly due to increased demand for raw materials and food from growing economies around the world. The boom has included American agricultural goods, which is to say farmers have been doing quite well recently.
Which is to say they don’t need the help, especially today. Though I guess “they” should be clarified as well.
Referring to beneficiaries as “farmers” underplays how giant agribusinesses really benefit from subsidized crop insurance. There have traditionally been no limits to premium support, meaning the richest businesses reap the most benefits. A provision from Sen. Tom Coburn to reduce payouts for farmers with over $750,000 in income was stripped from the final bill, despite passing the Senate twice.
I wonder who had it stripped? Could it be the Big Agriculture firms like Monsanto that have spent over $50 million lobbying Congress? Yeah, I’m going to go with that.
The price tag for the Farm Bill comes in at nearly $1 trillion. Most of that money is designed to enrich the already rich. Remember that next time someone tells you the 1% hate “Big Government.” Because austerity and fiscal discipline speeches haven’t stopped wasteful programs they have just given cover to cutting meager benefits for the poor.
Image of benefits card from Pennsylvania SNAP program.