Eliminating agricultural subsidies in the 2012 farm Bill could save taxpayers more than $100 billion over the next decade while having little impact on the country’s food supply or our national agricultural viability.
Really? Absolutely, at least according to the American Enterprise Institute. The conservative think tank proclaims in a recent white paper that federal programs supporting production ofcorn, wheat, cotton and other “program crops,” as well as subsidies paid todairy farmers sand sugar producers should be cut, along with subsidies for crop insurance and disaster aid.
“Today, farm policy consists of an array of subsidies, regulations, spending programs and land-use restrictions that are widely blamed for the increased cost of food, environmental degradation, fiscal burdens, and the failure of global trade negotiations,” AEI’s report declared. “These inefficient and outdated policies [were] subsidized by taxpayers in the 2008 farm bill at a cost of $307 billion.”
Here is their game plan for “fixing” the farm bill:
Severely reduce commodity programs. Direct payments will cost about $5 billion in 2012, AEI projected, and they’re unnecessary.But because market prices for crops eligible for price supports are likelyto remain well above trigger levels, there is no need to continue loan rate programs. Countercyclicalpayments should also be eliminated because they’re irrelevant and create barriers tointernational market access. The Average Crop Revenue Election program has further increased farmsubsidies for grains, rice, and soybean producers and will continue to do so if reauthorized; it, too,should be abolished.
Eliminate crop insurance subsidies. AEI’s number crunching claimed that the crop insuranceprogram is one of the most expensive ways of transferincome to farmers whilesupplying products that, absent subsidies, most farmers would never buy if they weren’t subsidized. The program has averaged$5.6 billion annually since 2007, one-third of total USDA expenditures on income transfers.
End disasteraid. The Supplemental Revenue Assistance Payments program cost $2.1 billion in 2008—almostfive times the projected cost. Such a program, according to AEI, encourages inefficient farming and livestock production and should be eliminated.
Conservation programs should be converted to “polluter pays.”That change would achieve the same conservation benefits and improve the signals about the real cost of agricultural production, AEI’s report stated. The various conservation programs USDA administers should be integrated, reducing competition among programs for the same land, and farmsshould be evaluated for program participation based on the whole farm or conservation program.