A Farm Bill At Last
Feb 06, 2014
After two years of debate, political fights involving the nutrition advocates and farm groups, we have a farm bill. Remember, 80% of the $956 billion is for food programs and the remaining 20% is for farm support.
The $8 billion reduction in food stamps doesn’t sit well with liberals, and a lot of conservatives don’t feel that farm spending was cut enough – even though the direct payments were eliminated from the bill.
The meat industry is very unhappy that country of origin labeling (COOL) was not fixed. Farmers and meat processors face the costly and inefficient possibility that the labeling of meat will become almost impossible to accomplish – trying to separate animals depending on where they were born, raised, and fattened for market is crazy. Canada and Mexico are ready to take this issue to the World Trade Organization. We haven’t heard the last of this mess.
The centerpiece of the farmer safety net is the federal crop insurance, which is expanded and receives more federal subsidy. Crop insurance will be tied to conservation compliance. In one respect, if you buy subsidized crop insurance, you should be expected to meet certain conservation standards to quality. On the other hand, this is just more red tape and regulation.
I think the farm bill is too complicated. We have two new supports – agriculture risk coverage and supplemental coverage option. If crop prices fall too low, they guarantee support.
I said earlier – everyone is not in love with the farm bill legislation. Sen. Pat Roberts (R-KS) had this to say: "When you look at the policies of this report, we have a return to government subsidies and farmers planting for the government. I cannot march backwards and deliver more spending, more regulations, and more waste." Sen. Chuck Grassley (R-IA) was almost as critical. They are both strong voices for agriculture and have been for years.
From my point of view, I am glad that we have a five-year farm bill. My biggest concern is that the level of crop insurance and target price supports in the bill will encourage over-production and distort farmer planting decisions. The market should signal to the farmer what to plant and not the government.
We now have five years to watch and wait to see how the bill works.