Pasture of Plenty
You thought you knew how bad the farm bill was.

Thursday, May 22, 2008

"LIFE IS LIKE a box of chocolates," Forrest Gump's mother used to say. "You never know what you're going to get." The same could be said of federal agricultural legislation. Arcane and often irrational, its subsidy provisions can be difficult to understand and, sometimes, even difficult to identify. Even after Congress passed a subsidy-riddled 673-page farm bill last week, with a price tag conservatively set at $289 billion, it was not entirely clear just how big a burden lawmakers had imposed on taxpayers. Now, however, the fine print is coming into focus, and -- surprise! -- the bill could authorize up to $16 billion more in crop subsidies than previously projected, according to the Agriculture Department.

The culprit is a new program called Average Crop Revenue Election, or ACRE for short. ACRE gives farmers an alternative to direct payments, which come regardless of how much money they make, and other subsidies. Starting in 2009, farmers can choose to trade in some of their traditional subsidies in return for a government promise to make up 90 percent of the difference between what they actually made from farming and their usual income. In principle, this provides farmers a federal safety net only in those years when prices or yields fall drastically -- that is, when they really need one. Congress added the optional ACRE program to the bill as a sop to reformers who, sensibly, wanted to replace the current subsidy system with a simpler insurance-style program. Such a wholesale change would, indeed, have been a real reform. But since the farm bill continued direct payments and other old-style subsidies, no one expected huge numbers of farmers to volunteer for the new ACRE deal.

Then farmers got a look at the bill's formula for determining benefits under ACRE. It pegs the subsidies to current, record-high prices for grain, meaning farmers would get paid if prices fall back to their historical and, for farmers, perfectly profitable norms. A program that started out as a streamlined insurance policy against extraordinary hardship has mutated into a possible guarantee of extraordinary prosperity. Small wonder that, as The Post's Dan Morgan reports, a farming blog is urging farmers to sign up for ACRE, which it describes as "lucrative beyond expectations."

The farm bill's defenders insist that a budgetary disaster will not come to pass, because grain prices will not come down much during the five years the bill will be in effect. "The program does not look excessively expensive for the lifetime of the farm bill," said Rep. Robert W. Goodlatte (Va.), the ranking Republican on the House Agriculture Committee. In other words, even if they don't have to pay extra for ACRE, Americans will have to pay higher food prices -- so they may as well get used to it. None of the legislators who rushed to override President Bush's veto of the bill yesterday will have the decency to blush the next time they pontificate about fiscal responsibility. But we can only wonder what other expensive surprises still lurk within this profoundly wasteful legislation.

View all comments that have been posted about this article.

© 2008 The Washington Post Company