New Farm Bill Will Continue To Cost Taxpayers Billions In Subsidies

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COLUMBIA - The current farm bill will expire on September 30th unless lawmakers agree on a new one. The crop subsidy program is one of many that may be affected when a new farm bill is passed.

A recent study by Public Interest Resource Group (PIRG), Apples to Twinkies 2013, compares taxpayer subsidies to produce and junk food. The study found nearly 28 percent of Missouri subsidies goes to corn production, a major junk food ingredient. This, as the government spent $19.2 billion dollars subsidizing the cost of junk food ingredients since 1995. Missouri spent $10.2 billion dollars in farm subsidies from 1995-2012 with corn subsidies topping the list. 58 percent of farms in Missouri, however, didn't receive any money and 80 percent of farmers in Boone County received less than $300 per year.

Eric Reuter grows 150 varieties of produce at Chert Hollow Farm, but has never received subsidies from the government.

"Right now I can't really compete with the quality of my vegetables, with the flavor, with the health, because price is the dominant factor in all of this and price is created by the USDA and the farm subsidy program," Reuter said.

The study by PIRG says, "Of the total $292.5 billion allotted in agriculture subsidies (1995-2012), 3.8 percent of farmers collected $178.5 billion, while 62 percent of farms did not receive any federal funds."

"The consumer has a very unfortunately skewed vision about what the value of food is when government action especially the USDA is artificially changing the supply and the price of these products," Reuter said.

Richard Oswald, a farmer in Northwest Missouri, receives crop insurance subsidies and direct payments for corn. He said he would like to see the crop insurance program strengthened in a new farm bill.

"Everything was so cheap to sell, we needed the subsidy for income," Oswald said.

"Agriculture is unique in the challenges that farmers face every day," said Garrett Hawkins, Missouri Farm Bureau National Legislative Programs Director. "Think back to last summer when we had historic drought, drought that we hadn't seen in decades and while we like to think that agriculture could operate completely free market, at times there is assistance that is needed, if you will, to help agriculture, namely farmers and ranchers if you will, overcome those challenges."

Many vegetable farmers had to face last year's drought without any assistance, because they were not eligible for crop insurance.

"Crop insurance programs as they are currently set up are set up to entirely favor large quantity soy farmers and large quantity growers," Reuter said. "Insurance programs, especially the way the government influences them, have no effect on smaller farms, because most crop insurance programs are done crop by crop."

The State Executive Director of The Farm Service Agency for Missouri, Mark Cadle, says most counties in Missouri offer crop insurance for grain, soybeans and corn. Crop insurance programs are organized by the type of crop and don't include most vegetables. But the insurance does guarantee farmers a return on their crop amid disasters such as frost, flooding or drought.

Farmers who are not eligible for crop insurance can apply for Non-Insured Disaster Assistance Program (NAP). This program is for any farmer who loses more than 50 percent of yields. The NAP program is included in both versions of the proposed farm bill.

"A fruit and vegetable farmer may not be eligible for a direct payment at this time, but he certainly is eligible for USDA assistance and that can come in the form of some conservation programs, in the form of NAP coverage for his crops and certainly some assistance with credit and capital needs, if needed," Cadle said.

Reuter said he looked in to applying for insurance programs but he had to provide information on each of his 150 crops and the yields over several years.

"For people like me it's just not worth it to sit down and do the paperwork," Reuter said.

The proposed House and Senate versions of the farm bill gets rid of direct payment subsidies to farmers. It creates a new program known as shallow loss. Shallow loss guarantees a farmer up to 90% of the revenue they made in the previous year.

"If you can grow your crop and know no matter what the feds will bail you out, you can keep your prices a lot lower," said Reuter.

Dan Smith, tax and budget advocate for PIRG, said even without direct payments, the new bill does not solve the problem of subsidizing junk food.

"This bill could, if prices fall, put taxpayers on the hook for more than the past, up to billions more," said Smith.
"Subsidies intended to help small family farms lost their way. 64 percent of subsidies go to the biggest 4 percent and most profitable farms," Alex Sprague, Midwest Field Organizer for PIRG, said.

PIRG delivered petitions from 278,000 citizens to Congress asking them to cut agricultural subsidies and "stop subsidizing obesity" on September 12th.

The House version of the bill has no limit on crop insurance subsidies. The bill cuts spending from the federal budget by reducing other programs.

If Congress did get rid of all subsidies, Hawkins says consumers would see higher food prices.

To see a comparison of the House and Senate versions of the farm bill visit: http://www.nfu.org/images/stories/legislation/SideBySide%20FINAL.pdf

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