Editor’s Note: This editorial is part of a series that looks at the challenges of tackling the growing federal debt and the specific programs that drive it. Read the previous installment on veterans’ benefits.
Though major inefficiencies and inequalities persist in how the United States distributes food, its fantastically productive agricultural sector has conquered the problem of supplying it. The most recent data from the Agriculture Department shows that there is enough food available in the United States to meet everyone’s minimum caloric needs almost twice over. Nor is farming an economically precarious pursuit. Net farm income is on course to hit $136.9 billion in 2023, a decrease relative to 2022 but still 26.6 percent above the 20-year average of $108.1 billion, according to USDA.
In other words, there’s no need for the United States to maintain its expensive agricultural safety net, whose origins lie in the long-ago Great Depression — at least not in its current form. Yet Congress is once again gearing up to reauthorize the system, which expires on Sept.30, through the quinquennial legislative exercise known as the Farm Bill.
The wider debate over federal debt should encompass this mélange of regulations and subsidies — from “price loss coverage” to “loan deficiency payments” — whose details are intelligible only to the relative handful of rural lawmakers, staff and lobbyists who control the legislative process. One of the most pernicious indirect consequences of the Senate’s bias in favor of small farm states has been to foster interest-group capture of agriculture policy.
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Abundant evidence shows a disproportionate share of the benefits flows to relatively high-income farmers who, as a group, are better off than the average American household. For reasons of both fairness and spending control, there should be income-based limits on these programs, but repeated efforts to impose them have failed.
Scrapping direct government supports for commodities such as corn and soybeans, contained in Title I of the current legislation, would save taxpayers $49.3 billion over 10 years, according to the Congressional Budget Office. A limited crop insurance program sufficient to protect farmers against truly catastrophic disasters might be necessary and appropriate. However, the current law’s lavishly subsidized insurance — the government pays about three-fifths of premiums — arguably reduces farmers’ incentives to mitigate risks and improve the resilience of their land. Tightening criteria by which insurance payouts are awarded would cut costs by $24.4 billion over 10 years, the CBO calculates, and likely make agriculture more sustainable to boot. Reducing the premium subsidy from 60 percent to 40 percent would save $20.9 billion. Another $7.4 billion could come from reducing federal support for administrative expenses of crop insurance companies and slicing their government-guaranteed rate of return from 14.5 percent to 12 percent.
Admittedly, these are small numbers relative to the CBO’s “baseline” projection of how much it would cost to extend existing legislation for 10 years: $1.4 trillion, of which $1.2 trillion is for programs that help people with low incomes pay for food, with the Supplemental Nutrition Assistance Program being by far the largest. Still, SNAP benefits are already shrinking in the short run as emergency pandemic provisions end; the CBO’s 10-year projection of the program’s costs actually represents a decline as a percentage of gross domestic product.
And yet, House Republicans’ proposal to raise the debt limit includes no cuts to farm subsidies, while tightening eligibility for SNAP at a savings of $11 billion over 10 years. No decent fiscal strategy would demand this sacrifice from the poor while asking nothing of the myriad special interests that feed off the farm bill’s wasteful largesse.