The final 5-year Farm Bill steaming towards the president’s desk after extended delays killed direct cash payments to farmer, and the SNAP (food stamp) cuts in the bill were limited to the “heat and eat” scenario where states artificially qualified beneficiaries for SNAP by paying them token amounts of low-income heating assistance. Not so bad, eh?
Not so fast says David Dayen at TNR. Perhaps the SNAP carnage was limited, but the “reform” of farm programs in the bill has been grossly oversold. The shift from direct payments to crop insurance, for example, is less impressive when you realize the extent to which producers are virtually guaranteed public funds to pay for insurance premiums, whether or not they register losses. And the crop insurance program’s costs have been rising even in years when profits are reasonably high.
On another front, the effort to discourage big public subsidies for large agribusiness concerns, the final bill may have been worse than either of the original House and Senate versions. Notes Dayan:
Referring to beneficiaries as “farmers” underplays how giant agribusinesses really benefit from subsidized crop insurance. There have traditionally been no limits to premium support, meaning the richest businesses reap the most benefits. A provision from Sen. Tom Coburn to reduce payouts for farmers with over $750,000 in income was stripped from the final bill, despite passing the Senate twice. The Environmental Working Group, a critic of crop insurance, estimates that 10,000 policyholders receive over $100,000 a year in subsidies annually, with some receiving over $1 million, while the bottom 80 percent of farmers, the mom-and-pop operations, collect only $5,000 annually. These are educated guesses, because under current law, the names of individual businesses receiving support are kept secret, a provision maintained in the new farm bill. The House version included a measure that would disclose which members of Congress receive subsidies, but that was dropped.
It’s a sign of how lobbyists can get their way in final legislation even when they’ve been reported as having lost earlier in the process. And it’s a sign of something else, too: a lack of transparency.
Moving away from direct payments and toward indirect insurance subsidies is an example of what author Suzanne Mettler calls “the submerged state.” So many federal social programs lurk underneath the surface that the public cannot get a good handle on who benefits from government largesse. “Appearing to emanate from the private sector, such policies obscure the role of the government and exaggerate that of the market,” Mettler says. And the vast majority of these programs benefit the wealthy, refuting the conceit that the rich boldly succeed without a government safety net protecting them.
Despite the long delays in final enactment of this farm bill, exhausting proponents of actual reform, it generally represent the status quo with more money. That won’t keep its sponsors from hailing it as a major reform, but you shouldn’t believe the hype.