Hello everybody out there in farm country. This radio commentary is brought to you by Monsanto, and John Deere. They are all friends, supporters, and allies of a healthy farm economy and prosperous rural America. Thank you.
And now for today’s commentary—
Here we are again, trying to get a farm bill passed. We have been operating under an extension of the old bill for the last year. Since I served as Secretary of Agriculture, the Congress has passed a new farm bill every 5 years. Although the bills have their own official names, they are just referred to as the farm bill.
The Senate just passed their version of the farm bill this week. It probably shouldn’t be called a farm bill. The bill proposes to spend 955 billion dollars over the next 10 years. 760 billion dollars (80%) of that bill’s money will be spent on food stamps and nutrition.
The commodity programs (programs to help farmers) will total 41 billion dollars – a little over 4%. That’s 80% of the money for food stamps and 4% for farm programs. I think it is important to put into perspective where the money goes. The Senate bill does cut the food stamp spending a paltry 4 billion dollars. By contrast, the House bill, which has not been passed in the House yet, cuts food stamps by 20 billion dollars.
When we are talking about a total of 760 billion dollars, neither of those cuts is significant. However, if the House is able to get their bill passed, then the two bills will have to be conferenced, and compromise will be necessary. The big fight will be over the food stamp cut – tiny as it is.
There are other programs that are funded in the bill. Conservation will need 58 billion dollars (about 6% of the total). Conservation will get less money because we have less acres in our conservation reserve than we used to have. We have released some less erosive acres to increase crop production. That makes sense.
The most significant changes in the new farm bill are in the commodity (farmer support) programs. Direct payments will be effectively eliminated, and they should be. Crop insurance will be given some additional money. The safety net for our principal crops will rely on crop insurance in case of severe drought or flooding. These adjustments are good.
Although I do worry about the risk that subsidized crop insurance can distort planting decisions. (I want farmers to make their planting decisions on the market and not on some government program.)
To sum it up, we have a Senate bill. We don’t have a House bill yet. If we get the House bill, they still have to put them together. My prediction is that we will get a farm bill some time this year. However, I won’t bet the farm on it.
Until next week, I am John Block from Washington.