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Farm bill analysis
Fri February 7, 2014
New farm bill changes U.S. ag policy
Not everyone likes the farm bill signed into law on Friday, but at least farmers will be able to start making informed decisions.
The biggest change in the 2014 farm bill is that the subsidies known as direct payments are gone. Instead of the government paying a known amount to farmers each year—at a fixed budget of $5 billion—the new system of subsidies will fluctuate, partly with market forces. That makes it really hard to predict how much the program will cost each year, says Iowa State University ag economist Chad Hart.
“There are going to be some years when these programs will be a lot less costly than direct payments,” Hart said. “There are going to be other years, especially when we see low prices and low revenue in agriculture, when these programs could cost dramatically more.”
The biggest farm bill program—the Supplemental Nutrition Assistance Program (SNAP), commonly called food stamps—varies year to year, too. But Congressional leaders say the compromise bill should save about $8 billion over 10 years from SNAP. House Republicans wanted much deeper cuts, but the figure is double what the Senate-passed farm bill called for.
The new farm bill also makes significant changes to conservation. Craig Cox, from the conservation advocacy organization the Environmental Working Group, has followed farm bills since he was a Senate agriculture committee staffer in 1995.
“There are some bright spots in the conservation title,” he said.
The biggest one, Cox says, is that conservation will be tied to crop insurance, which will now become the dominant safety net program. To receive federal help paying for crop insurance, farmers must show they’re protecting wetlands and land vulnerable to erosion. Also, there’s a penalty for plowing up virgin land that’s never before been farmed.
But Cox is disappointed overall funding for conservation is lower this year after decades of consistent increases.
“This farm bill breaks that pattern,” Cox said, “and there’s actually going to be less of a commitment to conservation in this bill than there has been in previous bills.”
Plenty of others are upset with the compromise, too for various reasons.
The National Cattlemen’s Beef Association, the National Pork Producers Council and the National Chicken Council are disappointed required country of origin labels for meat remain intact. Sen. Charles Grassley, an Iowa Republican, says he’s dismayed that legislation he authored placing a cap on the amount of subsidies farmers can receive was discarded in final negotiations.
Some have long charged that federal farm subsidies disproportionately benefit farmers that work large tracts of land and plant large-scale commodities crops like corn and soybeans.
“You know it comes to a certain point where it hurts the little guys,” said Chris Petersen, a farmer from Clear Lake, Iowa. “It gets to a point where they cannot compete against these guys getting all of this money.”
Back in fall 2012, Petersen rallied on Capitol Hill with a widely diverse group of farm bill supporters pushing for passage. But now he says he’d rather endure another extension than settle for a bill he fears will hurt smaller famers like him.
“If it’s a bad bill they’re proposing for five years – anymore it seems to go six or seven (years) or whatever, before they get it figured out,” he said. “A couple of years of uncertainty and a little heartburn is better than five or six years.”
But Petersen is likely in the minority. Most Midwestern farmers seem ready to be done with the haggling and delays. And agriculture leaders in Congress are already patting themselves on the back for demonstrating bipartisanship in action—action that stretched on for more than two years.
Harvest Public Media story