The Corner

A Reminder of How Bad the Farm Bill Is

This morning Senator Grassley has a piece in the Daily Iowan arguing that Congress needs to get the job done and past the farm bill quickly. He writes:

The current farm bill expires Sept. 30. As Iowa’s senior U.S. senator, I will continue my call to move forward. The worst drought to hit the Corn Belt in 56 years ought to be a wake-up call. For 80 years, the United States has sought to protect U.S. food security with a safety net that helps the nation’s food producers fill America’s breadbasket. Washington needs to get the job done.

I disagree. So here is a little reminder of what is in the farm bill, how big it is, and other details relevant to this discussion:

  • The farm bill is massive; it would spend almost $1 trillion over the next decade.

  • For the most part, farmers are doing very well. As Drew White at Heritage reminds us, in spite of and partially thanks to this year’s drought, net farm income is estimated to set a new record of $122.2 billion in 2012.   

  • The bill cuts direct subsides, but it preserves some $22 billion on subsidy programs for farmers.

  • To make up for the reduced direct subsidies, it replaces them with other payments to farmers such as the shallow-loss program; it provides protection to farmers from bad weather and poor prices at a time when crop prices are at an all-time high. (The same would be true for dairy farmers.)

  • Taxpayers will continue to foot most of the crop-insurance costs on top of that.

  • Eighty percent of the spending in the bill is devoted to food stamps, known as the Supplemental Nutrition Assistance Program. When the food-stamp program was first expanded nationally in the 1970s, just 1 in 50 Americans participated. Today, one in seven Americans receive $134 each month, at a monthly cost of more than $6 billion. This bipartisan farm bill would help make these high levels of dependency permanent.

Mix cronyism and dependency and you get this gigantic farm bill. As such, lawmakers should be careful what they wish for when they call for its adoption–and so should the American people. Here is a good recap video from AEI about the farm bill:

Veronique de Rugy — Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

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