House Narrowly Rejects Modest Bipartisan Measure to Limit Subsidies for Largest Agribusinesses

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Dan Smith


Five Ways the New Farm Bill Brings Home the Bacon for Big Ag

Statement of Dan Smith, U.S. PIRG Tax and Budget Advocate, on the Farm Bill being voted on by the U.S. House:

“U.S. PIRG opposes the House Farm Bill (H.R. 1947). Like the Senate’s proposed Farm Bill, this legislation would keep the gravy train flowing for big agribusiness, locking in their unjustified corporate handouts for the next five years. With Congress focused on how to fix the budget, our elected leaders shouldn’t squander the opportunity to cut off these outrageous giveaways to Big Ag once and for all.

“The House rejected even modest amendments to reduce subsidies for the most profitable agribusinesses. The Kind-Petri amendment, which would have cut off certain subsidies for agribusinesses with high incomes, failed with a narrow 208-217 vote.

“This Farm Bill will continue the current practice of disproportionately subsidizing the largest agribusinesses, which are already profitable and don’t need taxpayer handouts. While the Big Ag lobby claims to stand up for small farmers, just 4 percent of agribusinesses eat up 74 percent of these subsidies, with more than 60 percent of farms never seeing a dime.

“Congress needs to make serious changes to this legislation or reject it entirely. Our elected leaders should stand up for taxpayers, not Big Ag.”

Five Ways the Farm Bill Brings Home the Bacon for Big Ag

Big Ag’s Bait and Switch

The House Farm bill eliminates the “Direct Payments” program — long the poster child for wasteful agricultural subsidies, known for handing out checks to rich landowners who don’t even farm. But in a political sleight of hand, the bill plows more than half the savings from cutting Direct Payments into a new subsidy program that will continue to do more of the same by giving handouts to large agribusinesses that don’t need our tax dollars.

This new “Price Loss Coverage” program guarantees agribusinesses 85 percent of the revenue they received in these previous years, locking in the record-high prices of recent years. A study commissioned by the Environmental Working Group found that if prices fall, the new program could cost taxpayers $20 billion more over the next decade than the discredited Direct Payments program.

Big profits Mean Big Subsidies

Since 1995, just 4 percent of agribusinesses have made off with three-quarters of the subsidies. Yet the House bill rejected modest measures to reduce or eliminate subsidies for agribusinesses with high incomes. For millionaire farmers, the checks will keep on coming.

No Caps Means Million-Dollar Checks

Both the House and Senate rejected bipartisan measures to put any sort of cap on how big a check an agribusiness can receive to help pay its insurance bill. Currently, taxpayers pay over 60 percent of the premiums for agribusiness insurance, which compensates them for poor yields, price declines, or both. On top of that, taxpayers pay 15 private insurance companies $1.3 billion to run these programs.

Because the program has no caps, just 26 agribusinesses have received more than $1 million in a single year, while 80 percent of farms get $5,000 on average, according to a study from the Environmental Working Group.

Instead of reining in this program and capping how much agribusinesses can receive, both the House and Senate bills actually expand it.

Paying to Market Big Macs and Underwear Abroad

The House and Senate bills make no changes to the $200-million-per-year Market Access Program, which subsidizes ad campaigns for giant agricultural companies and their trade associations. The House strongly rejecteded an amendment to end this program. Companies receiving this funding have ranged from McDonald’s to Fruit of the Loom. Taxpayer money has even been used to pay for a reality TV show in India to promote cotton. Companies are perfectly capable of buying their own airtime — they don’t need taxpayer dollars to subsidize their ads.

Subsidizing Junk Food

At a time when America faces an obesity epidemic, billions in subsidies underwrite the production of junk food additives. Between 1995 and 2011, U.S. PIRG research found that $18.2 billion subsidized four common junk food additives, including high-fructose corn syrup. That’s enough to buy every kid under 18 in the U.S. eight 2-liter bottles of soda every year. By contrast, the subsidies for apples — the only fruit or vegetable that gets significant subsidies — would pay for less than half of an apple for each taxpayer every year.

Neither the House nor Senate Farm Bill makes meaningful reforms to correct this imbalance in our food policy.

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U.S. PIRG, the federation of state Public Interest Research Groups, is a consumer group that stands up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society.