REMEMBER HOW backers of the 2014 farm bill promised that it would reform costly and wasteful agriculture subsidies and save taxpayers money? And remember how the critics of the bill said it was basically a scheme to repackage and perpetuate the old system, potentially at a higher cost? Well, it turns out that the critics were right, according to the first comprehensive estimate of the bill’s impact.
Despite its lofty title and despite the fact that it is based on federally funded research conducted by the University of Missouri, the “U.S. Baseline Briefing Book: Projections for Agricultural and Biofuel Markets,” published this month, is not an official statement by the Department of Agriculture. In every other way, though, it is an authoritative document, and what it reveals is that government spending on commodity programs has in no significant sense been checked.
Yes, the old system of direct payments to growers of corn, soybeans and a few other crops have been replaced by two heavily subsidized “insurance” programs that ostensibly protect only against price swings and natural disasters beyond the farmers’ control. In fact, though, the programs insure against such relatively common risks that they are tantamount to direct payments, and nearly as lucrative — sometimes more so. As a separate Environmental Working Group analysis notes, corn growers in most counties of Ohio, Iowa, Minnesota and Kansas are projected to receive payouts of $60 to $200 an acre for 2014, up from an average of $24 per acre under the direct payment program.
Overall, the “insurance” programs will pay out more than $24 billion between 2014 and 2018, according to the Briefing Book, which is $2.4 billion more than direct payments cost in the previous half-decade. The report also projects that the government’s total crop insurance costs will hit nearly $85 billion between now and 2024, compared to the $67 billion paid out between 2005 and 2014.
Like so many of its predecessors, the 2014 farm bill promised cheaper, more efficient federal agricultural policy, but delivered the opposite. And Congress has already started working on the next one, due in 2019.