Published June 20, 2013
WASHINGTON – Multimillion-dollar taxpayer-backed safety nets for sticky-rice makers, alfalfa growers and catfish farmers are just three of the myriad subsidies tucked into the massive 629-page House farm bill that could get a vote as early as Thursday.
The House continues to debate a host of amendments to the bill, as both parties battle over the proper balance of funding for farm programs and food stamps, both of which are covered in the legislation. The House has moved to cut funding for both, and is weighing additional changes, but several high-powered conservative groups continue to blast it as a pork-filled government giveaway. They and their allies in Congress say that unless some parts are scaled back or cut out completely, they won’t support it.
With more than 100 amendments tacked on to the House version and more being considered, neither side of the aisle appears to be entirely happy with how the law looks now. It's unclear whether they will reach a middle ground and pass it.
That’s good, critics say, because as a whole, the bill does little to fix the decades of loopholes and costly subsidies that make another appearance in the bill. Other big beneficiaries of price guarantees in the House bill include peanut and cotton farmers.
“This so-called farm bill is filled with corporate handouts,” Christine Harbin, a federal policy analyst for Americans for Prosperity, told FoxNews.com.
Harbin’s group objects to the subsidies farmers receive to buy crop insurance – a practice she calls “corporate welfare.”
One federal subsidy would guarantee farmers of Japonica Rice – the kind used in sushi rolls -- that if market prices dip below 115 percent of the average price of all types of rice, the government will pick up the difference.
House lawmakers began debating their version of the farm bill on Tuesday. House Speaker John Boehner and Rep. Frank Lucas have both spoken out in favor of the bill – a bipartisan show of support National Farmers Union President Roger Johnson called “promising.”
These programs were initially put in place to protect farmers by supplementing their income during difficult harvest. Supporters say some of the subsidies are still needed in order to provide a strong safety net for America's farmers, who fuel one of the country's largest industries.
The American Farm Bureau earlier this month blasted those groups who are attacking the bill.
"It is unfortunate that outside political groups with no interest in the agricultural economy or the farm and ranch families who underpin our rural economies have reacted by promoting inaction, effectively supporting no reform, no progress," said Bob Stallman, president of the American Farm Bureau Federation.
So far, most of the discussion in the House has centered on funding for food stamps but now others are raising alarm about the subsidies that remain in the package.
According to The Heritage Foundation, House lawmakers have strayed off course from the bill’s original purpose: to level the playing field for American farmers.
In an ideal world, the Washington think tank argues, reforms written into the farm bill would “end the perverse subsidies to profitable agricultural enterprises paid by middle-class taxpayers.” It would also eliminate the tariffs and quotas and price “supports” that artificially inflate food prices. But that’s not necessarily happening, though the bill does propose cutting roughly $4 billion a year in overall costs.
Scott Faber, vice president at the Environmental Working Group, calls the House version of the bill “terrible” and a “windfall” for already profitable farmers and insurance companies.
“If it fails, it will be because it contained too little reform and too much unbridled pork,” he said in a statement.
Some of the subsidies up for consideration are rooted in programs written in the 1930s when the country’s agriculture landscape looked a lot different than it does now. Back then, American farmers were being edged out of their livelihoods and reporting record losses. Today, farmers are earning more than they have in four decades.
Critics of the bill also want the government to scale back or modify who it provides aid to. They say the areas of the biggest waste include billions of dollars on subsidies that benefit businesses and people who don’t need the assistance to stay afloat.
Bruce Springsteen and Jon Bon Jovi are just two examples of rich rockers-turned-farmers benefiting from taxpayer dollars.
Between 1995 and 2012, the government gave American farmers $256 billion in subsidies.
Springsteen scored some because he leases land to an organic farmer. Bon Jovi, who raises bees on his estate, benefited from a government program where he only had to pay $100 in property taxes.
The massive farm bill slowly chugged its way through Congress for two years without gaining any real traction. The current five-year authorization of the bill passed in 2008 was extended last year until Sept. 30 because Congress couldn’t agree on a plan.
On Thursday, the House is expected to take up debate on crop insurance.
While the crops are made in the U.S.A., they are being insured by private companies in Japan, Switzerland, Australia and Canada. According to a report by Environmental Working Group, Americans forked over $7.1 billion between from 2007 to 2011 to sell crop insurance policies to 20 foreign insurance companies.
Today, taxpayers pay 38 percent to 80 percent of premiums to insure more than 100 commodities, and subsidize insurers for administrating the coverage -- but the costs have skyrocketed in recent years. In 2000-2006, the annual average cost to taxpayers was around $3.1 billion. Estimates for 2013-2022 clock in around $8.9 billion a year, according to The Heritage Foundation.
“Farmers do not incur the full costs of their risk taking, thus they are more likely to take greater risks with their planting and cultivation of crops,” according to the Heritage Foundation report. “The subsidies also prompt farmers to purchase excess insurances, with the added costs falling upon taxpayers.”
Other points of contention include counter-cyclical payments, direct loan subsidies and million of dollars in extra disaster relief assistance.
The Heritage Foundation argues that while the idea of providing a safety net to farmers against Mother Nature sounds good in theory, what it actually does is let lawmakers declare “emergencies” to routinely release funds and “further subsidizes farmers who (unwisely) forgo crop insurance.”
The government has a commodity program that gives farmers unable to secure commercial credit the opportunity to borrow money. Direct loans are available for up to $300,000 but opponents say all the loans and loan guarantees do are prop up poorly run operations.
Another key component of the Farm Bill is the Direct Payments Program. This program gives payments to producers based on past production; farmers collect the payments even when prices are high or their land is uncultivated, provided their average annual farm income does not exceed $750,000. In some cases, however, high-income commercial farms gathered millions of dollars in subsidies without planting a single seed.
Last week, the Senate passed its version of the bill which would spend $955 billion over 10 years. The price tag in the House -- $939 billion – is less than the Senate version mostly due to variations in food-stamp spending. The House version cuts deeper into the program than the Senate version.