The 2012 U.S. Farm Bill: History, Problems and Opportunities for Reform. Overheads from two publications on current agricultural policy, and opportunities for reform.

1. The 2012 U.S. Farm Bill:
History, Problems and
Opportunities for Reform

2. www.nationalaglawcenter.org/assets/crs/RS22131.pdf

15. www.downsizinggovernment.org/agriculture/food-subsidies
School Breakfast and Lunch Services
Supporting Students or Farmers?
Chris Edwards • July, 2009 (excerpt)
One affirmative case calls for expanding
student lunches for those living in poverty.
The federal government funds school breakfast
and lunch programs at 80,000 public schools...
The lunch program covers 30 million children, and the breakfast program covers
about 8 million children. Federal spending on the two food programs, for
free and low-cost meals, was $16 billion in fiscal 2009.
The programs had their origins in the Federal Surplus Commodities Corporation
established in 1935. That entity was designed to distribute “surplus” meat, dairy,
and wheat products to the needy, including children in schools. An official history
of the school lunch program notes that the farm policies of the 1930s attempted
“to remove price-depressing surplus foods from the market” yet goes on to note

18. Food and Nutrition Subsidies
• The bulk of Farm Bill spending is not for farms at all, but for food
and nutritional assistance programs that constitute the largest
means-tested federal poverty programs outside Medicare.
• Of the $284 billion that the CBO projected the 2008 Farm Bill
would cost (for the 2008– 2012 fiscal year period)
• $189 billion (about 65 per- cent) was spent on Title IV programs,
which include food stamps (now known as the Supplemental
Nutri- tion Assistance Program), the Women, Infants, and Children
program, school lunch programs, and other such programs that are
mainly aimed at providing assistance to children and adults from all
families who suffer from poverty.

19. Current Policy Debates
• Should the programs should be used to target increased
consumption of specific categories of food (for example, fruits
and vegetables), which poor families and individuals should be
pro- gram eligible, and how much the country can afford to
spend on these types of targeted income-transfer programs.7
• The issue of targeting food assistance to particular foods to
reduce obesity, especially among children, and to more generally
encourage healthy diets will be among the most hotly contested
Farm Bill issues.

20. Separate Nutrition from Ag.

21. Separate Nutrition from Ag.
• Separating the nutrition programs from the farm subsidy provisions of
the Farm Bill would reduce the potential for logrolling, which has
meant that members from urban districts and states vote in favor of
farm subsidies to obtain support for nutrition programs.

22. Separate Nutrition from Ag.
• Separating the nutrition programs from the farm subsidy provisions of
the Farm Bill would reduce the potential for logrolling, which has
meant that members from urban districts and states vote in favor of
farm subsidies to obtain support for nutrition programs.
• In addition, since members representing farm constituencies dominate
the agriculture committees in Congress, they do not have a
background or interest in nutrition programs, which represent the
bulk of the outlays under their purview. There is no natural connec-
tion between these parts of the Farm Bill, and to continue the linkage
reduces the quality of policy on both sides.

23. Separate Nutrition from Ag.
• Separating the nutrition programs from the farm subsidy provisions of
the Farm Bill would reduce the potential for logrolling, which has
meant that members from urban districts and states vote in favor of
farm subsidies to obtain support for nutrition programs.
• In addition, since members representing farm constituencies dominate
the agriculture committees in Congress, they do not have a
background or interest in nutrition programs, which represent the
bulk of the outlays under their purview. There is no natural connec-
tion between these parts of the Farm Bill, and to continue the linkage
reduces the quality of policy on both sides.

24. Commodity-oriented
Farm Bill programs (Title 1)

25. Commodity-oriented
Farm Bill programs (Title 1)
• Provide income, price support, and other risk-management
programs for a wide range of agricultural commodities,
especially major crops like wheat, corn, rice, cotton, and
soybeans, and other relatively smaller-revenue crops like barley,
peanuts, and minor oilseeds (for example, safflower, sunflower,
and canola).

26. Commodity-oriented
Farm Bill programs (Title 1)
• Provide income, price support, and other risk-management
programs for a wide range of agricultural commodities,
especially major crops like wheat, corn, rice, cotton, and
soybeans, and other relatively smaller-revenue crops like barley,
peanuts, and minor oilseeds (for example, safflower, sunflower,
and canola).
• Some programs (for example, direct pay- ments and price
supports) apply broadly. Others are targeted to specific
commodities, including cotton, milk, and sugar.

27. Commodity-oriented
Farm Bill programs (Title 1)
• Provide income, price support, and other risk-management
programs for a wide range of agricultural commodities,
especially major crops like wheat, corn, rice, cotton, and
soybeans, and other relatively smaller-revenue crops like barley,
peanuts, and minor oilseeds (for example, safflower, sunflower,
and canola).
• Some programs (for example, direct pay- ments and price
supports) apply broadly. Others are targeted to specific
commodities, including cotton, milk, and sugar.

28. Direct Payments

29. Direct Payments
• Unless modified by Congress, direct payments will amount to
about $5 billion in 2012.

30. Direct Payments
• Unless modified by Congress, direct payments will amount to
about $5 billion in 2012.
• These payments are based on acres of program crops planted
between 1983 and 1985 or from 1998 and 2001, and on estimated
per-acre average yields for those crops from 1983 & 1985.

31. Direct Payments
• Unless modified by Congress, direct payments will amount to
about $5 billion in 2012.
• These payments are based on acres of program crops planted
between 1983 and 1985 or from 1998 and 2001, and on estimated
per-acre average yields for those crops from 1983 & 1985.
• The payments are essentially gifts to farmers and landowners from
taxpayers that are generally unrelated to the current use of the
land (although fruits and vegetables cannot be planted on those
acres). They are not targeted to low-income farm households, and
larger farms and wealthier farm families and landowners generally
receive larger payments.

32. Dairy Subsidies

33. Dairy Subsidies
• Dairy Policy. Some Title I programs target specific commodities
and classes of farm operations, including dairy, sugar, and cotton.

34. Dairy Subsidies
• Dairy Policy. Some Title I programs target specific commodities
and classes of farm operations, including dairy, sugar, and cotton.
• Taxpayers have provided milk producers with approximately $1
billion in annual subsidies, regardless of whether or not the dairy
sector faced financial difficulties because of high input costs or
low milk prices.

35. Dairy Subsidies
• Dairy Policy. Some Title I programs target specific commodities
and classes of farm operations, including dairy, sugar, and cotton.
• Taxpayers have provided milk producers with approximately $1
billion in annual subsidies, regardless of whether or not the dairy
sector faced financial difficulties because of high input costs or
low milk prices.
• Consumers, many of whom are also taxpayers, have also indirectly
subsi- dized milk producers through higher prices to the tune of
more than $1 billion a year as a direct result of Farm Bill–
sanctioned programs.14

36. Title IV: Crop Insurance

37. Title IV: Crop Insurance
• The Risk Management Agency runs the USDA’s farm insurance programs.
Both “yield” and “revenue” insurance are available to farmers to protect
against adverse weather, pests, and low market prices.

38. Title IV: Crop Insurance
• The Risk Management Agency runs the USDA’s farm insurance programs.
Both “yield” and “revenue” insurance are available to farmers to protect
against adverse weather, pests, and low market prices.
• The RMA describes its mission as helping farmers “manage their business
risks through effective, market-based risk management solutions.” 11 The
RMA has annual outlays of about $4 billion, employs about 550 people, and
its activities are far from “market-based.”

39. Title IV: Crop Insurance
• The Risk Management Agency runs the USDA’s farm insurance programs.
Both “yield” and “revenue” insurance are available to farmers to protect
against adverse weather, pests, and low market prices.
• The RMA describes its mission as helping farmers “manage their business
risks through effective, market-based risk management solutions.” 11 The
RMA has annual outlays of about $4 billion, employs about 550 people, and
its activities are far from “market-based.”
• Federal crop insurance policies are sold and serviced by 16 private
insurance companies, which receive federal subsidies for their
administrative costs and insurance risks. The firms operate like a cartel,
earning excess profits from the high premiums they charge.12

40. Title IV: Crop Insurance
• The Risk Management Agency runs the USDA’s farm insurance programs.
Both “yield” and “revenue” insurance are available to farmers to protect
against adverse weather, pests, and low market prices.
• The RMA describes its mission as helping farmers “manage their business
risks through effective, market-based risk management solutions.” 11 The
RMA has annual outlays of about $4 billion, employs about 550 people, and
its activities are far from “market-based.”
• Federal crop insurance policies are sold and serviced by 16 private
insurance companies, which receive federal subsidies for their
administrative costs and insurance risks. The firms operate like a cartel,
earning excess profits from the high premiums they charge.12
• They get away with that because the government provides [subsidies]