In addition to the new, costly “agricultural risk coverage,” “adverse market payment,” and “supplemental coverage option” programs in the Senate’s Agriculture Reform, Food, and Jobs Act (S. 954), there are a variety of provisions carved out for special interests of all crops:
There’s a provision requiring the study of the feasibility of making popcorn a “covered commodity,” which would allow it to join the ranks of rice, corn, sorghum, soy beans and other crops, potentially costing $94 million over a ten-year period. There’s also an amendment requiring research regarding a crop insurance program for alfalfa.
Dairy farmers milked the Hill’s purse as well as any lobby, cementing a new marginal protection program and market stabilization program, guaranteeing $4 margins (per hundredweight) if they voluntarily enroll in the program. If farmers enroll in the program, they agree to cut supply whenever their margins fall too low for an extended period of time. So, farmers are guaranteed $4 margins on 80 percent of average milk production on the tax payer’s dime, while also promising to slow production anytime margins fall below this number, increasing prices for the consumer. No wonder House Speaker John Boehner (R-O.H.) dubbed the program “soviet-style.” Price controls in addition to production limitations? Lenin would indeed be proud; the program costs the government a cool $302 million over 10 years.
Cotton also ginned up its own set of subsidies: to the tune of $3.7 billion over 10 years, the Stacked Income Protection Plan (STAX) gives cotton growers insurance with 80 percent of the premium subsidized by taxpayers. It allows producers to purchase coverage for income losses between 10 and 30 percent. The plan is meant to alleviate trade tensions with Brazil, which had filed a case with the WTO accusing the United States of unfairly subsidizing its cotton exports; some worry STAX will do little to mitigate the dispute. The dispute settlement will cost the United States $820 million over the coming years.
The bill also provides for the continuation of the current sugar program, one that keeps U.S. sugar prices artificially above world prices. Since it’s a continuation of a 1990 program, it doesn’t count against the budget in the CBO’s estimation, but it costs $140 million a year, according to a 2008 estimate. This on top of news in March that the government may be on the hook for buying back 400,000 tons of sugar to keep prices high so that processors don’t default on $862 million of government loans.
An amendment to deregulate the growing of industrial hemp was not allowed to the floor. Likewise, an amendment to end USDA inspection of catfish was stalled. Currently, the FDA and USDA both inspect catfish in an attempt to protect southern catfish farmers from price-competitive Asian catfish, primarily from Vietnam. The Government Accountability Office has estimated the duplicate program costs $14 million a year.
Another $340 million is set aside for the Rural Energy for America Program, which gives support to producers who purchase, install, and construct renewable energy systems. Meanwhile, the USDA’s 2014 budget provides for only $2.5 billion in agricultural research, despite the proven economic benefits of such research (as much as 8-10 percent according to some estimates). Despite these benefits, U.S. policy continues to be directed towards sweetheart deals for Senators and providing insurance that primarily benefits the largest of farms.
So, while Senators continue to trumpet the bill as a bipartisan effort with real implications for deficit reduction, they’re all pretending the bill is something it just isn’t. Big agriculture continues to get their handout, masqueraded as legislation designed to cut food stamps, increase insurance, and increase taxpayers’ exposure to risk.