The Dirty Secret in the Farm Bill

Some big questions remain.

Some big questions remain.

Provisions in the farm bill passed by the Senate this week have set the stage for Big Ag to win a monumental shell game. The hapless victims will be American taxpayers.

Currently, commodity farmers get handouts totaling about $5 billion per year from the government in direct subsidies, whether they need them or not. Large farms and agricultural corporations receive most of this largesse. Under the new Senate bill, these subsidies would disappear and be replaced by a $9-billion expansion in crop insurance support, which reimburses farmers for losses caused by weather.

Crop insurance is really just handout by another name. The government picks up nearly two thirds of the cost of premiums. It also pays private insurance companies more than $1 billion a year oversee the policies. But at least in theory, benefits are paid out only to the farmers who actually need them.

This is where political sleight-of-hand enters the picture. Commodity subsidies received by individual farmers are part of the public record and are published in a database maintained by the Environmental Working Group, a Washington, DC nonprofit.

In contrast, crop insurance payouts are confidential. Even though their money is being spent, taxpayers have no way of knowing who gets how much. How convenient, if you happen to be a wealthy farmer who might not want others to know how deeply your face is planted in the public trough.

Take the example of Congressman Stephen Fincher, a Tennessee Republican. Last month he vigorously argued in favor for slashing $20 billion from the farm bill’s Supplemental Nutrition Assistance Program (SNAP, more commonly known as food stamps) which helps feed nearly 50 million needy Americans.

In support of his stance, he hauled out the Bible, quoting from Thessalonians: “The one who is unwilling to work shall not eat.”

What the Congressman, who is also a well-to-do farmer, failed to mention is that over the past dozen years he has pocketed farm bill crop subsidies totaling $3.5 million. Last year his take, according to the EWG, was close to $70,000 in subsidies alone, more than twice the median income for Tennessee families.

At least Rep. Fincher’s hypocrisy was exposed. If the provisions of the Senate bill become law, similar shenanigans may never see the light of day.

As the House of Representatives begins to take up the farm bill, lawmakers who like to base their legislative decisions on Biblical quotations should reflect upon the following verse from Luke: “For there is nothing covered, that shall not be revealed; neither hid, that shall not be known.”

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2 comments

  1. Brad Wilson says:

    Farm prices are low for many commodity crops, and could fall also for corn, rice and soybeans. We saw this following the 1980s price spike. We had a 25-30 year farm crisis, starting in 1981, as USDA-ERS data (Commodity Costs and Returns) clearly shows. Under these conditions, Crop Insurance would be wholly inadequate, just as subsidies have been since before 1981. This is well known to specialists, but I’ve never seen it in the mainsteam media, or from the big food movement leaders (excepting Wenonah Hauter, Food and Water Watch, Foodopoly). (See Daryll E. Ray, for example through “Primer: Revenue Insurance in the 2012 Farm Bill.”) This is not surprising to the movement that fought on these cheap farm/food issues for 4-5 decades prior to the new food movement.

    Also missing here is information about the major “Farm Justice Proposals for the 2012 Farm Bill,” now 2013. Econometric studies on the two alternatives find that they would free up $95 billion by eliminating the need for subsidies. That’s what we had in the past, and farm bills made a profit (net gain) on many years, such as through 1948, and on more recent decades for soybeans and other crops. The taxpayers have never needed to pay out all of that money, and farmers would be much better off, and consumers too, without all of the cheap hfcs and transfat ingredients, CAFO feeds, etc.

    These, then are the hidden beneficiaries of the farm bill, of the missing market management programs of the original nonsubsidy New Deal farm bills, where farmers largely paid for their own programs (paid interest on Price Floor loans). The mega commodity buyers are many times larger than the big farmers criticized here, who look tiny in comparison. They’ve never shown any need for any compensations, and have no pay limits, unlike commodity farmers, who have lost trillions (in today’s dollars), most of whom have been forced out of business.

    I’ve been writing on these specific misunderstandings for many years. Few food bloggers have been willing to even discuss these deeper issues.

  2. Brad Wilson says:

    The myth of subsidies hides the real winners, commodity buyers (agribusiness,) NOT “big ag” farmers, yet this doesn’t even get debated in mainstream circles. What AgBiz gets is much larger than what Big Ag gets, and is not (technically) opposed at all by this article. The benefits to AgBiz (Cargill, ADM, Kelloggs, Tyson, Smithfield, Dean Foods, Kraft, cotton buyers, etc.) are not at all in any database, and are often not known even in general (who buys how much at how much of a reduction, thanks to the farm bill). They have no means testing, and no payment caps. But ignoring these real issues ALSO makes “big ag” farmers get bigger, caused by cheap farm prices most of the time. Big ag and small full-time ag farmers are all thought to be “Big Ag,” and all are in the top 10% of the farm subsidy database, while the bottom 80% is made up of much smaller, part time farms, & retired/dead farmers, who are said to be victims. EWG has never tried to tell this story. For Stephen Fincher, then, he’s criticized for getting subsidies and for hurting hungry kids and for being too good for his own rural constituency, but that last part is false. He’s secretly supported AgBiz against all of his farm-state farms, by supporting zero price floor farm bills. Subsidies then hide this, and here he’s complimented, in the end, for supporting his own constituents, even as he has abandoned them. All of Big Ag and Small (full-time) Ag (& micro-time ag) & Fincher types have reductions, but that’s not known, prior to getting any subsidies, while Ag Biz does not. So Ag Biz gets pure benefits, even with record profits, while all of Agriculture has rarely had net farm income as high as we had in the 1940s, even with much greater yields per acre. Crop insurance has now had deficiency payments hidden in it, (farm bill subsidies to compensate for bad farm bills). No insurance company will insure this without being subsidized itself. But no subsidies are needed for farmers with fair prices (an end to cheap corn, cotton, milk, etc.). So with fair prices, we free up $96 billion for SNAP, conservation, local food, etc., but Fincher & friends and even this article oppose that. For clarity see “Hidden Farm Bill Pie” and “The Hidden Farm Bill: Secret Trillions for Agribusiness”

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