Critics Call for More Cuts in Farm Bill, Crop Insurance

By Charles Abbott | December 10, 2012

Congress should slash at least $100 billion in costs from the U.S. farm bill – three or four times more than cuts currently proposed – and resist calls for a hurry-up vote this week, a dozen anti-deficit and environmental groups said on Monday.

At a news conference, they said the $5 billion-a-year “direct payment” subsidy to farmers should be eliminated as part of temporary legislation that would bridge the gap to a new five-year law in 2013.

That would give lawmakers time for a clear-eyed overhaul of farm policy, they said.

Milk prices at the grocery store could double next month under an outmoded statute that took effect with expiration of the 2008 farm law on Sept. 30. It would be the first major impact to be felt from the failure to pass a new farm law.

Agricultural leaders in Congress now hope to attach the farm bill to a deficit reduction package that is needed by year’s end to avoid automatic tax increases and spending cuts in January. They say the $23 billion to $36 billion in proposed savings in the farm bill could help reduce the federal debt.

But the critics at Monday’s event said savings as currently envisaged are far too limited, and that it is too late in 2012 for lawmakers diligently to consider and debate a mammoth $500 billion bill covering everything from crop subsidies to food stamps, soil conservation and rural economic development.

‘RELATIVELY EASY’ TO SAVE $100 BILLION

“The time to pass the farm bill has come and gone,” said Scott Faber, of the Environmental Working Group, an organization whose goal is to protect public health.

Instead, “Congress should pass a fiscally responsible one-year extension of farm and food programs and allow the House (of Representatives) to debate the future of farm subsidies.”

Faber said it would be “relatively easy” to save $100 billion over 10 years. Two simple changes in the crop insurance program – lowering the premium subsidy to 30 percent from the current 62 percent and ending a federal payment to insurers to cover part of their overhead expenses – could save $53 billion, he said.

Agricultural economist Vincent Smith, part of the farm policy team at the American Enterprise Institute, said farm spending was likely to climb despite the savings trumpeted by the version of the bill already passed by the Senate or the one currently pending in the House.

Both bills would expand the crop insurance system, the largest strand in the farm safety net. They create insurance-like programs tied to crop production that could be challenged globally as unfair subsidies, he said.

“We have expanded the risk of WTO (World Trade Organization) problems to 17 or 18 crops,” from chickpeas to corn, said Smith.

Andrew Moylan, of R Street, a fiscally conservative think tank, said all sides now agree on ending the direct payment, at least. “Put the savings in the bank now,” he said.

House Agriculture Committee Chairman Frank Lucas last week left open the possibility of another round of the payments for the coming crop season if the farm bill is delayed.

Lucas, Oklahoma Republican, and other congressional farm leaders were not immediately available for comment on the criticism leveled on Monday.

SUGAR SUBSIDY, BIOTECH RIDERS TARGETED

Blockbuster crops like corn and soybeans are not the only target for would-be cost cutters. Tom Schatz of Citizens Against Government Waste said sugar subsidies should be a target for reform in a farm bill next year.

Brandon Arnold of the National Taxpayers Union said there would be a “much better opportunity to write good policy,” if agricultural programs and public nutrition programs such as food stamps for the poor were split into separate bills.

It would end the often lengthy vote trading between urban and rural lawmakers, he said.

Skeptics of agricultural biotechnology, meanwhile, campaigned against provisions in the House farm bill that would weaken federal oversight of genetically engineered crops. They said the language should be outlawed from a final version of the farm bill.

The riders would restrict the scope of the USDA to review the safety of biotech crops and “force the backdoor approval” of them by short deadlines for USDA action before approval is triggered by default, opponents said in a letter to Congress.

 

 

 

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Latest Comments

  • December 11, 2012 at 2:07 pm
    insurance mom says:
    Discussions of the "farm bill" rarely point out what a huge part of this expenditure goes to nutrition programs, not into farmers' pockets. When you complain about the America... read more
  • December 11, 2012 at 1:49 pm
    alan says:
    Great ideas lets just cut $100 billion from the American farmer--the people who feed us and give it to our Middle Eastern friends. Then we could all have a bowl of oil for bre... read more
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