Tom Cotton and the Farm Bill
12:00 AM, Jun 19, 2014 • By JAY COST
What about the farm bill as public policy? I am currently writing a history of political corruption, to which I dedicated a chapter to farm subsidies, and I say without hesitation: the farm bill represents everything that is wrong with the federal government. It is far from the sexiest topic of policy discussion, and at this point it is not the most wasteful program out there (although 50 years ago it probably was), but it is nevertheless the quintessence of Beltway dysfunction.
There are many reasons why, so let’s just hit the highlights:
1.) It is a transfer of wealth from the poor to the wealthy. Farmers used to be much poorer than non-farmers, but not anymore. Farm income now exceeds non-farm income on average. Moreover, the farm subsidies tend to benefit the wealthiest of farmers, so the distributional effect is even more perverse.
2.) It wastes substantial money every year. The costs to taxpayers (in the form of higher taxes) and consumers (in the form of higher food prices) is actually greater than the net subsidy direct to farmers. This is known as “deadweight loss.” The actual figure is hard to calculate, but in the 1990s economists tagged it at roughly $5 billion.
3.) It lacks an intelligent design. As Mercatus scholar Matthew Mitchell put it recently, the farm bill is a “grab bag of subsidies, in-kind transfers, protectionist trade barriers, and price and revenue supports for agribusiness.” The number of farm programs has actually increased over the last 30 years even as the number of farmers has declined. The reason has to do with the logroll. None of the individual programs in the farm bill could pass by themselves on the floor of the House or the Senate, so they are linked together. The more, the merrier, in fact.
But what this means is that the farm bill often pushes and pulls simultaneously. It provides incentives for retiring acres from production but also provides generous insurance subsidies to induce farmers to farm on marginal land. It has programs to encourage healthy eating while also subsidizing the high fructose corn syrup industry. And so on.
It used to be that the large organizations—like the Farm Bureau—could provide some overarching rationality to the program, but they have been in decline for generations. Today, the politics tend to be dominated by commodity groups and agribusinesses. So, it is really just a smorgasbord of givebacks without any rationality to it.
4.) It is political payola. Congress loves the farm bill, which is why it has not passed a permanent one since 1948. It prefers to do it in five-year, temporary increments to keep all these groups coming to Washington, D.C., with their hands out, asking for subsidies. Importantly, the interest groups give an enormous portion of the bounty back to members of Congress, in the form of campaign contributions. In 2012, total contributions from individuals and PACs connected to the farm industry amounted to $82 million. Independent expenditures kicked in another $10 million.
This is a great scam, if you can get it. You get elected to Congress, use the byzantine structure and impermeable complexity of the farm bill to funnel $20 billion or so of taxpayer money to the farm industry, then they turn around and fund your campaign. If you did this in the waste disposal industry in New Jersey, the FBI would label you a mafia boss and send you to jail for racketeering. But do it in Congress and everybody calls you the, “Honorable So-And-So.”
And this is why conservatives should be so excited about Tom Cotton. He said no to this corruption. It would have been politically easy to vote for the farm bill; the rest of his state delegation did, after all. So did Pryor, and the safe move would be to vote the same and neutralize the issue altogether. But he understood just how pernicious the farm bill really is, and took a stand against it.
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