Morning Bell: The Only Way to Reform the Farm Bill

by Daren Bakst, Heritage Foundation, September 10, 2013

The best option before Congress is a new extension of the 2008 farm bill. The existing farm bills passed by the House and Senate are flawed, so a compromise with these bills would only lead to bad policy for the American people.

Extending the existing law would give Congress time to identify the best ways to keep the food stamp program and farm programs separated from each other.

Ending the Unholy Alliance

With close to 80 percent of “farm bill” costs consisting of food stamps, Congress has for decades combined these disparate programs into one bill, enabling it to avoid addressing the merits of the programs.

Separating the two is a prerequisite for reform.

The House, unlike the Senate, took this critical step in July. Unfortunately, lawmakers missed the purpose of separation, which is to reform the agriculture-only farm bill.

Attempting to compromise with the Senate would almost certainly put food stamps back in the farm bill.

That’s why Congress should not force through a farm bill simply for the sake of passing a bill. An extension would give lawmakers the chance to address critical reforms.

Problems Remain

The House and Senate farm bills fail to make even common-sense reforms and in some cases, make things worse. For instance:

• Both bills add costly shallow-loss programs that protect farmers from even minor losses, effectively guaranteeing their income.
• Both bills increase the cost of crop insurance, the most expensive farm program. While President Obama would cut about $12 billion over 10 years, the Senate would increase costs by about $5 billion, and the House would increase costs by about $9 billion.
• The House bill would not make a single common-sense reform to crop insurance, such as imposing caps on the subsidies received by farmers or implementing a means test. The Senate bill would make only a minor reform that would reduce premium subsidies for farmers with adjusted gross income of $750,000 or more.
• Both bills leave intact the sugar program, which drives up prices for consumers and has been estimated to cost three manufacturing jobs for every sugar growing and harvesting job saved.
• The House bill would make two new costly programs—the shallow-loss and reference price programs—permanent law. (That is, the programs do not sunset like most other programs.) The House bill also makes the sugar program permanent law. As a result, Congress would have far less reason to revisit and fix these programs in the future.
• The Senate bill has no work requirement of any kind for food stamp recipients.

Any savings that can be achieved by passing a bill now pale in comparison to what the savings should be if sound policy is adopted later. By passing a bad farm bill, Congress would be locking in five years of bad public policy.

An Extension Is Common

Congress just passed a farm bill extension at the start of 2013. Farmers were fine, and the food stamp program continued without missing a beat.

The choice is not between enacting a farm bill and doing nothing. Instead, the choice is between pushing bad policy through Congress and taking some time, by passing an extension, so that sound policy can be developed in a deliberate and transparent manner.

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