If Congress is looking for somewhere to make spending cuts, Chris Edwards of the Cato Institute has some ideas.
It’s farm-bill time on Capitol Hill, which means a lot of money is about to go out the window. The largest components of the farm bill are agriculture subsidies and SNAP, the food-assistance program for low-income households. Over the next ten years, without reforms, the farm bill is projected to cost about $1.5 trillion.
“Expensive farm bills usually pass because of a giant logroll—rural members favor farm programs and urban members favor the food stamp program,” Edwards writes. But that logroll could also work in the opposite direction. Edwards proposes reforming welfare for the poor alongside reforming welfare for the wealthy.
Agriculture subsidies don’t usually go to archetypal poor farmers. They mostly go to people who are doing just fine. Doing great, actually. “Only about one-third of the nation’s 2 million farms receive regular subsidies, and the bulk of the aid goes to a small group of large farms,” Edwards writes. He cites an AEI study that found that 68 percent of subsidies from the three largest agriculture programs go to the top 10 percent of farms.
“All in all, there are about 150 overlapping federal programs for farmers and agriculture that cost more than $30 billion a year,” Edwards writes. He continues:
An overhaul of these programs is long overdue because farmers are not struggling as they were in the 1930s when the farm welfare system was created. Indeed, far from it—the average income of all farm households in 2021 was $135,281, which was 32 percent higher than the $102,316 average of all U.S. households.
Edwards writes that New Zealand successfully ended most of its agriculture subsidies decades ago. “Farmers adjusted by cutting costs, diversifying land use, seeking nonfarm income, and developing new markets. Over time, farm productivity and incomes rose.” It could happen here, too.
SNAP already got slightly stricter work requirements in the debt-ceiling deal. Edwards says Congress should go further on SNAP reform. Writing for Capital Matters in June, he listed ten types of fraud in the SNAP program, such as falsifying eligibility or selling benefits.
The total cost of the SNAP program has doubled in the past four years. That’s not a typo. “SNAP has doubled in cost since 2019 to more than $120 billion a year,” Edwards writes. Reform is needed. Edwards suggests making junk food ineligible for benefits. About 25 percent of SNAP spending currently goes to junk food.
Since politicians have already promised, on a bipartisan basis, to not address the root cause of the country’s debt problem — entitlement spending — the farm bill seems like a good place to make some cuts. It would be tinkering around the edges of the budget, but at least it would show that it’s possible to stand up to special interests and cut wasteful spending, and it could correct some of the perverse incentives facing farmers and SNAP recipients alike.