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This week, I decided to research the Farm Bill to write a little bit about some of the “reforms” House Republicans who support the bill are so proud of. The CBO estimates savings of $35 billion over the next ten years (vs. the current baseline). The CBO is also notorious for underestimating costs, and it looks like this time won’t be any different.
Agriculture policy in the United States is among the worst examples of pork spending, corporate welfare, harmful subsidies, and anti-free market government intervention in the world. And the Farm Bill that is going to conference in Congress doesn’t accomplish any real reform to these bad policies. In fact, in some respects it makes things worse.
The Republicans who passed the bill are lauding the end of the direct payments program, a move which they project to save $9.3 billion. While the end of one wasteful entitlement is a step in the right direction, Congress has created a brand new entitlement known as shallow-loss crop insurance, which you can read all about here.
While that article mentions a plethora of terrible things about shallow loss insurance, a new report by the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri indicates that “the 2013 House- and Senate-passed farm bills are likely to cost taxpayers more than previously thought.” Specifically, “FAPRI estimates that expanded federal crop insurance subsidies would increase taxpayer spending (compared to the current funding baseline) by $15.2 billion and $10 billion, respectively.”
Catch that? Eliminating the direct payments program saves $9.3 billion, but the new shallow loss entitlement would increase spending by at least $15.2 billion in the House bill and $10 billion in the Senate bill. The supposedly “conservative” Republicans, who were able to pass their Farm bill without a single Democrat vote, are celebrating the end of direct payments while creating a brand new, market-distorting subsidy for farmers that will cost more taxpayer dollars than it saves.
K Street wins, taxpayers lose.