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Letter of Opposition: Bloated Senate Farm Bill, S. 3240

June 01, 2012 J

Dear Senators:

Next week, the Senate will begin consideration of the Agriculture Reform, Food and Jobs Act of 2012 (S. 3240), the omnibus farm bill that sets agricultural and food policy in the United States. Like its predecessors, the 2012 Farm Bill is shaping up to be a big handout to agri-business industries at the expense of the American taxpayer. On behalf of more than two million Americans for Prosperity activists in all 50 states, I am writing to say that AFP stands opposed to this legislation and the continued practice of using tax dollars to prop up private industries.

This bill embodies Washington’s continued reckless, runaway spending. Facing a national debt of nearly $16 trillion, now is the time for government officials to look for ways to rein in spending. Cutting farm subsidies is one smart way to save taxpayers money. Unfortunately, the Senate is prepared to spend more than ever. The non-partisan Congressional Budget Office (CBO) estimates that the 2012 farm bill will cost $969 billion over the 2013-2022 period. American taxpayers can’t afford to continue this out-of-control spending.

This bill doesn’t go far enough in cutting wasteful subsidies. Although the bill repeals many of the current price and income support programs, it replaces them with new programs that essentially do the same thing. This is far from true reform. Under the “shallow-loss” program, one of the main provisions of the 2012 farm bill, Congress would guarantee that a crop producer’s revenues will never drop below 90% of the average revenues over the previous five years. The bill also spends more on subsidies in other areas; it provides unlimited subsidies for crop insurance, and it greatly expands subsidy programs on research and development.

This is plain old corporate welfare. Every five years or so, the farm bill is reauthorized under the guise of supporting small family farms, but most of the benefits end up in the pockets of the wealthiest farmers. According to the Environmental Working Group, only 10% of farm businesses have received 74% of all farm subsidies between 1995 and 2010. In fact, 62% of farms in the U.S. received zero subsidy payments during this period. It’s clear that the benefits under the farm bill go toward a very concentrated few.

There are many smart ways to cut spending in the 2012 farm bill, elements that this bill lacks.

Subsidies should be cut for agricultural and energy research and development (Title VII and Title IX). Although most industries in the U.S. pay for their own research and development, the agriculture and renewable energy industries are noteworthy exceptions. According to CBO, the bill will spend over $2.4 billion subsidizing energy and agricultural research programs over the 2013-2022 period—more than doubling previous funding. Instead, federally-funded agricultural research should be eliminated entirely and transferred to the private sector.

Nutrition assistance programs (Title IV) should be severed from this bill and considered separately. These programs account for more than three-fourths of the total cost of the bill, and they should receive independent consideration in stand-alone legislation. The Supplemental Nutrition Assistance Program (SNAP) is in serious need of reform, and it’s duplicative of similar USDA programs.

The shallow-loss program (Agricultural Risk Coverage, or ARC) should be eliminated. Government should not be in the business of guaranteeing income in any sector of the economy. This is a brand-new program created in the 2012 farm bill, and it will be very expensive for American taxpayers—$28.5 billion over the 2013-2022 period according to CBO.

Federal spending on crop insurance programs (Title XI) should be cut. Farmers are generally better equipped to handle business risks than other sectors of the economy, since they tend to be wealthier than average and have relatively low debt. Plus, farms have a much lower rate of failure than other industries. Nevertheless, the 2012 farm bill expands the amount that the federal government will spend on crop insurance assistance—CBO estimates that this line item will amount to $94.6 billion over the 2013-2022 period, which is $5.1 billion more than current law.

Additionally, AFP is concerned about Senator Feinstein’s so-called Egg Products Inspection Act Amendments that would set a dangerous precedent for allowing federal bureaucrats to dictate how farmers raise and care for their animals. The language would unnecessarily inject the federal government with no measureable benefit to public health or animal well-being. If approved, it would increase the size of government, increase the cost of eggs for consumers, and cost rural farm jobs.

For these reasons, Americans for Prosperity strongly opposes S. 3240, the Agriculture Reform, Food and Jobs Act of 2012. American taxpayers deserve a better agricultural policy.

Sincerely,

James Valvo
Director of Policy
Americans for Prosperity

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