Updates on the Farm Bill

The first in a continuing series of posts concerning the 2012 Farm Bill

Two days ago the 2012 version of the Farm Bill was introduced to the Senate after passing committee 16-5, and today it was announced that the bill will be second on the Senate docket once lawmakers return from recess next week. For those who don’t know, the Farm Bill, which is historically renewed roughly every five years, is a massive piece of legislation, with the 2008 version costing an estimated $307 billion dollars. It’s benefactors were more varied than its name would suggest. It allocated $35 billion for ‘direct payments’, which now are the subject of much controversy, with opponents pointing out that large and already profitable farming companies receive the lion’s share of these payments. However, a huge majority, nearly two-thirds of the money in the ‘Farm Bill’, goes to nutritional assistance programs, commonly called ‘Food Stamp’ programs. It was the large price of these programs that caused President Bush to veto the bill back in 2008, which was then overruled by Congress.

The 2012 Farm Bill, however, is being hyped as a major reform in agriculture policy. This year’s price tag is substantially larger in total that the 2008 version, but it covers much more and is intended to run over a 10-year period, instead of the 4-year period of the 2008 Farm Bill. Indeed, the CBO reports the 2012 Farm Bill to save $23.6 billion over a ten-year period. The payments break down like this (keep in mind these totals are for the entire 10-year length of the bill):

  • $774.8 billion – Supplemental Nutrition Assistance Program  (“Food Stamp” programs)
  • $89.8 billion – Crop Insurance Subsidies
  • $66.6 billion – Commodity Subsidies
  • $65.3 billion – Farm Conservation Programs

The current form of the Farm Bill eliminates ‘direct payments’, which are the source for the majority of the $23.6 billion dollar reported savings, along with other, smaller programs. The Farm Bill instead replaces them with crop insurance, the cost of which has been rising along with crop prices in recent years. The end result of these insurance payments would be an almost guaranteed profit for those who received them. It is still uncertain whether the Farm Bill will be enacted before the end of this session of Congress.

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