Reader FS and the farm bill

Lifted from comments cactus style, Reader FS fills in some of the info on the farm bill:

Here are CBO figures on the new farm bill.

Total expenditures, 2008 through 2012: $301.382 Billion (B), or about $60 billion per year.

CBO computes changes in expenditures relative to its March 2008 budget baseline. The total changes over the 2008-2012 period are:

Commodity program -1.875 billion (B)

Conservation: 2.845 B

Trade: 0.161 B

Nutrition (i.e., Food Stamps) 3.111 B
(for the 10 year period of 2008-2017, this jumps to 9.669 B)

Credit program: -0.396 B

Rural development: 0.122 B

Research: 0.031 B

Forestry: 0.038 B

Energy: 0.615 B

Horticulture & Organic Ag: 0.402 B

Livestock: 0.001 B

Crop Insurance: -4.517 B

Commodity futures: 0.000 B

Misc: 0.190 B

Trade & Tax provisions: 4.930 B

Total change: 5.659 B

I don’t know for certain, but I’d guess that the ACRE program is part of the 4.930 B.


Here’s a quick explanation of why these changes are taking place.

The ACRE program now being introduced is designed to be a permanent disaster assistance program. It’s intended to replace ad-hoc disaster assistance that Congress provides on a frequent basis – particularly in election years.

From a broad perspective, disaster assistance should be understood as being free crop insurance. Farmers recover their losses once under their crop insurance policies and then a second time via disaster aid. What could be sweeter? However, to reach an agreement on this bill, Congress was forced to take money out of the crop insurance program in order to fund the ACRE program. This was done by reducing the overlap in payments between the two programs.

Of course, major legislative changes like this don’t just happen by accident. The concept of a permanent disaster aid program (though not necessarily the ACRE program itself) was being pushed by a number of the farm commodity groups, which wanted greater assurance that money would be available on a timely basis. Also, certain commodity groups were due to lose a large portion of their government commodity program payments due to high crop prices. By proposing a new federal program, the commodity groups were able to establish a much higher price support guarantee than farmers would have received if the existing programs had simply been extended. Voila! The money will still be headed their way.

This doesn’t mean that the ACRE program is all bad. Considering how much money Congress has been providing in ad-hoc disaster aid recently, it’s possible that total expenditures may actually go down under the ACRE program. Of course, this assumes that Congress will finally stop passing ad-hoc disaster assistance legislation.

Let me just say that my experiences during the past several months remind me of the old saying that you never want to watch sausages or legislation being made.

This one by reader FS