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The down on the farm bill

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April 30, 2008

When President Bush took office, one of his early orders of business was the 2002 renewal of the farm bill. He had idealistic plans to slash taxpayer farm subsidies and place income limits on those who could receive those subsidies.

Farm-state lawmakers and the farm lobby had a good laugh over that and went about business as usual, only more so. That farm bill expired last October and Congress has been wrangling over its renewal ever since, getting by on a series of short-term extensions of the old bill.

Congressional negotiators have agreed on a new bill. And although the president has made some pallid veto threats, it looks like reform of our costly, wasteful system of farm subsidies is not going to be a Bush legacy.

The bill is big. Estimates of its five-year cost range from $280 billion to over $300 billion. With farm and food prices so high, it is hard to justify subsidies for basic commodities like corn and wheat, which is why, perhaps, the final piece in the puzzle was agreement to increase the spending on low-income nutrition programs — school lunches, food stamps — to over $10 billion.

Under Bush administration doctrine, the measure is not supposed to increase taxes, but the nutrition spending will be paid for in part by a “Customs user fee,” which to the untutored sounds a lot like an import tax.

There is a modest cut in subsidies, $400 million out of $5.2 billion, and a cut of $250 million for crop damage, but over a 10-year period — not the five years of the life of the bill. Even with the cut, there is $3.8 billion left as a guarantee against weather-related crop losses.

Gone in the course of the talks was Bush’s plan to limit payments to wealthy farmers, those with an adjusted gross income of over $200,000. Instead, the lawmakers leaned toward limiting payments to wealthy non-farmers, people who earn only a small part of their income from actual farming.

The subsidy for corn-derived ethanol is to be cut from 51 cents to 45 cents a gallon, but any hopes that this was the beginning of wisdom on that spectacularly ill-conceived program were dashed when lawmakers extended the subsidy through 2010.

The development of cellulosic ethanol, quite possibly another technological chimera, came in for $400 million.

Thus, prospects for serious changes to our system of farm subsidies and supports must wait another five years. Maybe another president will have better luck.

One Response to The down on the farm bill

  1. Janice

    April 30, 2008 at 12:37 pm

    Maybe we need to end the subsidies for the oil companies showing record profits quarter after quarter. Putting our food in direct competition with our fuel is stupid. Giving our tax dollars away to companies making record profits by contributing to the demise of our economy is stupid. Subsidizing the destruction of food to make inefficient fuel that could be made more efficiently from other crops is stupid.

    Not giving sizable subsidies to develop real renewable free fuel (solar, wind, geothermal, tidal, etc.) is really stupid. In fact, I can’t think of much that our government is doing in the energy arena that isn’t stupid.

    Oh, and borrowing 10 billion a week to cover costs of this misbegotten invasion of Iraq is really stupid. Imagine what 10 billion a week would do to fix our failing economy, develop alternative clean energy, rebuild our infrastructure, and provide universal health care and education to every American citizen? It would go a long way!

    If you tell the truth you don’t have to remember anything.
    Mark Twain