What are Senate appropriators doing to address two new farm programs whose costs are spiraling out of control? They are increasing the costs even more.
Cotton growers just can’t seem to get enough handouts, and many Senate appropriators are happy to funnel even more money their way at the expense of taxpayers.
The Senate agriculture appropriations bill would add cotton to the two new massive commodity programs, the Agricultural Risk Coverage and Price Loss Coverage programs. These programs, originally projected to cost $18 billion over their first five years, are now projected to cost $31 billion.
But instead of addressing this $13 billion cost overrun, some legislators decided to run it up even further by adding cotton to the mix.
It’s not like there’s a shortage of handouts for cotton. Cotton growers already participate in the federal crop insurance program, and taxpayers pay 62 percent of the premiums for participating farmers. That’s a sweet deal.
Plus, there’s a special crop insurance program created just for cotton in the 2014 farm bill called STAX. Taxpayers cover an astonishing 80 percent of the premiums for this program. Over the last several years, taxpayers have also had to shell out $800 million to the Brazilian cotton industry to settle long-standing trade disputes with Brazil over U.S. trade-distorting cotton subsidies.
Congress intentionally excluded cotton from the two massive new farm handout programs because of trade concerns that would arise if cotton were part of these programs. But lawmakers seem inclined to throw caution—and more hard-earned tax dollars—to the wind.
The Senate agriculture appropriations bill would invite trade retaliation, quite possibly forcing taxpayers to pay even more money to Brazil to avoid such retaliation. These drastic changes to farm programs would be made even though the process for the next farm bill is well under way.
If there are concerns, it should be addressed during this process where ideally, policymakers can take the necessary time to think through critical agricultural policy issues.
Ironically, farm handout apologists are fond of arguing against opening up the farm bill outside the farm bill process. However, when it means increasing handouts, they want it wide open.
There are big issues that need to be addressed with the next farm bill. For example, policymakers should be asking why taxpayers are being forced to help agricultural producers, primarily large agribusinesses, with normal business risk such as changes in revenue.
For cotton growers, as an example, the federal crop insurance program can provide them government checks even if they have record crop production.
Why do sophisticated agribusinesses need constant help operating in the marketplace, but a mom and pop shop doesn’t?
For that matter, why is it that so many other agricultural producers, such as those in livestock and specialty crops (e.g. fruit and vegetables), can succeed without getting government help to operate in the marketplace?
During this next farm bill debate, legislators should ensure that, if there is a safety net, it is properly focused to help farmers deal with major crop losses, not to help large agricultural producers meet revenue targets.
This doesn’t mean there wouldn’t be subsidies. It means, though, that taxpayers wouldn’t be on the hook for whatever indefensible scheme agricultural interests dream up to maximize farm handouts.
Before then though, Congress should reject efforts to use the appropriations process to expand farm programs, including by adding cotton to the two new out-of-control commodity programs.
The appropriations process shouldn’t ignore taxpayers by creating yet another handout system for agricultural special interests.