A mixed farm bill

The U.S Senate authorized a $956 billion farm bill and trade groups are threatening challenges before the World Trade Organization in Geneva.  The legislation sets farm and food policies for the next five years, though the Congressional Budget Office scores the cost over ten years.   

By a vote of 68-32 the Senate sent President Obama, who praised the bill and is expected to sign it Friday, a vast farm bill, the first since 2008, setting food policy priorities some critics see as “farm business as usual” and others see as certain to prompt an agricultural trade war with Canada and Mexico. As in the House, the Senate bill had bipartisan support.

{mosads}The 2014 farm bill will cut Supplemental Nutrition Assistance Program, funded at $756 billion, by $8.6 billion. It is a far cry from the $40 billion Republicans threatened to cut from the program popularly known as food stamps.

GOP bluster over significant cuts to food stamps was a symbolic gesture aimed to please their conservative base. In the end, the GOP could get only a modest cut, but expect them to herald it as a major policy accomplishment in eliminating what they see as a bloated and wasteful spending program.

Many Democrats, including Democratic Leader Nancy Pelosi (Calif.), supported the House version of the farm bill with the minor cut to food stamps. She seemed relieved when the House bill passed. She can now tell San Francisco voters she successfully fought back Tea Party efforts to cut $40 billion from food stamp assistance. ‘

The 2014 farm bill may reduce the government’s deficit by $16.5 billion over the next ten years. However, clever congressional language, inventive multi-year timeframes and varying crop year definitions may make any cuts unlikely. The only sure cuts in the farm bill is $8.4 billion in SNAP, courtesy of Republicans who spent considerable political capital on the subject.

Federal assistance to the farm sector goes virtually unchanged from previous bills. “Direct payments,” paid to farmers when crop prices tanked or for unfavorable crop conditions, are, mostly shifted to crop insurance. DP payments, another form of farm income insurance, amounted to nearly $5 billion annually.

Congress placed caps on crop insurance payments which are still too costly. Farming of yesteryear was risky both price-wise and weather-wise. It is less risky today, even for small farmers.as sophisticated technology is widely available for farmers to guard against adverse weather conditions and volatile price movements. Farm programs, like crop insurance, must eventually be scaled back to reflect wide scale farmer use of technology to lessen their risk and maximize their incomes.

The farm bill still permits wealthy investors to benefit handsomely from programs intended for struggling farmers. Millionaires and corporate investors can qualify for farm assistance that should go to farmers “actively engaged” in production agriculture.

The new bill allows economic incentives for farmers to manage soil and wetlands. This should discourage production abuse of fragile lands but may not reduce overall program costs.

Country of origin labeling, known in the farm press as COOL, is a hot topic with the meat industry and one they argue will cause a trade war with Canada and Mexico. COOL requires product labeling to identify location of birth, growth and slaughter of all livestock. 

Meat industry critics say this information is useless to consumers and costly for them to maintain on the thousands of head of livestock marketed. Others see COOL as a food safety issue. For example, if poultry in California is tainted, consumers in New England could use labeling information to purchase, say, Arkansas poultry. COOL is a complex and controversial issue that may ultimately be decided by the World Trade Organization.

Efforts by Tea Party Republicans to circumvent California’s new law on humane livestock treatment from producers selling into the state were stripped from the House bill. The California law goes into effect in January and requires humane and larger confinement cages for laying hens and improved growing conditions for calves for veal and gestating sows.

For alternative agriculture programs, like urban agriculture and local and sustainable programs, the farm bill increases some funding. For example, $150 million goes to Farmers Market and Local Food Promotion with minor program modification. Similar food programs popular with consumers also gained more funding.

The farm bill lacks sufficient funding for use of technology in food marketing. Government historically has performed this role. Increasingly, consumers will be required to use technology, such as handheld devices, to make informed in-store decisions on food purchases. This will require investment by food marketers and consumer education. Food shopping is quickly becoming a high technology activity that Congress and industry must address.   

In sum, the farm bill is a mixed and somewhat muddled bag of polices for production, marketing and trade. We get better environmental stewardship but continued market interference by government in farming decisions and marginalization of small farmers in favor of corporate agribusiness.

A former Washington diplomat, Patterson is an agricultural economist and food policy analyst in San Francisco.