Sanford's Statement on House Passage of Farm Bill
Jul 11, 2013
This afternoon I voted against the latest version of the Farm Bill to come before the House, and I applaud my colleagues in the House Agricultural Committee for their work to bring about this bill. Their efforts were earnest and in good faith, but I ultimately voted no because I have seen this dance toward reform come up short of watching out for the taxpayer since I first voted for the Freedom to Farm bill in the mid 90’s. This version is certainly better; for instance, to their credit, this bill was brought to the floor without the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps. While I am pleased that SNAP is being decoupled from the agricultural portion of the bill, this legislation does not go far enough in enacting needed reforms to our expenditures on farm subsidies, and so I believe the bill is still wanting for the following reasons:
Insurance may prove even more costly than direct payment. While it is good news that the direct payments program (where farmers received money even if they weren’t cultivating their land) is being replaced, the crop insurance program that replaces it could very well end up costing more. The crop insurance program could result in farmers earning more if prices drop than if they stay at their current historical highs. In effect, a price drop in commodities such as corn or soybeans would trigger a support payment that could exceed what their income would be if the price stayed elevated.
Furthermore, these price triggers are set at points that if prices drop to their lower historical averages, from their current highs, this could lead to runaway payments for taxpayers. For this reason, an amendment was put in place in this legislation to cap the potential downside of the new insurance spending….but while the change is permanent, the taxpayer protection element lasts for only the first 6 years of the legislation. Similarly, we were promised that the conferees between the House and Senate bill would be instructed to include an amendment capping these payments for farmers making over $250,000 dollars. But…it’s not binding, as there is no way to force the Senate conferees to subscribe to what the House has instructed. It’s reasonable for farmers to want coverage in case of catastrophe, but taxpayers should not be responsible for providing a price backstop for commodity markets.
Lastly, this Farm Bill repeals the underlying 1938 and 1949 permanent farm law. Over the years, reformers have been rebuffed with charges that not passing a bill would result in reverting to this draconian legislation that would end up costing taxpayers even more than the bill currently being considered. While I welcome this change, because of the opportunities it would in theory provide to further reforming agricultural subsidies, this Farm Bill would instead become the new permanent law. Meaning we’d lock in these new crop insurance programs and high commodity prices in perpetuity. After the six years mentioned previously, the provisions limiting payments, and thereby potential cost to the taxpayer, would expire and not be part of the permanent law. All proponents of such programs would need to do to maintain their price guarantees is to then protect the new permanent law. This would make future reform even more difficult. For these reasons I cast my vote against the Farm Bill.