HERITAGE ADVISES END TO COMMODITY, CROP INSURANCE PROGRAMS
The Heritage Foundation is laying out its case for eliminating commodity-support programs and crop insurance policies that protect farmers' revenue losses. Pro Ag on Wednesday obtained a copy of a report that will guide the agenda of the conservative think tank's lobbying arm, Heritage Action, when negotiations over the next farm bill ramp up. The report argues that most farmers have the means to manage risk without taxpayer help, and the roughly $15 billion spent annually on subsidies distorts planting decisions while promoting risky practices, like abandoning crop diversification or farming land that is likely to flood or erode.
"Although farms are generally financially healthy ... some farmers are going to lose their farms, just as restaurant owners will lose their restaurants and pastors will lose their churches," the report says. "The federal government should not be guaranteeing that all operations will survive, and, even worse, guaranteeing that all operations will flourish."
The Heritage Foundation calls for an end to several programs enacted in the 2014 Farm Bill, including the commodity-support programs Agriculture Risk Coverage and Price Loss Coverage, as well as the new dairy insurance program. U.S. sugar policy that controls production and imports to maintain certain prices also should be eliminated, it advises. The group also recommends that federal crop insurance only protect against deep yield losses and disasters, not against losses in revenue, which now account for 77 percent of all policies. Producers could select the same coverage levels available now, but taxpayers would only subsidize policies with up to 70 percent protection. To help with the transition, one-time block grants should be given to states to use for agricultural purposes, the group suggests. Read the report here.
Some early reactions:
Dale Moore, executive director of public policy at the American Farm Bureau Federation: The Heritage Foundation has once again proposed leaving farmers and ranchers without a viable safety net, he says, and he questions whether researchers at Heritage Action considered the current farm economy and the challenges facing dairy and cotton producers, in particular. Congress and agriculture groups in recent years have worked to move toward a more market-oriented system, Moore says. The Farm Bureau doesn't believe good agriculture policy means sacrificing the people who grow food.
Tom Sell, principal of the lobbying firm Combest, Sell & Associates: Congress has rejected the Heritage Foundation's arguments in the past, as lawmakers realize farmers take on "extraordinary financial risks" growing crops for a "volatile and distorted world market."
"They know the farm policies that Heritage's 65 pages of ink try to demean represent one-quarter of one percent of the federal budget and that the risk of getting this area of policy wrong is far greater than this small cost, which has fostered the most productive and dynamic agricultural sector in the history of the world," said Sell, who is an adviser to Farm Policy Facts, a coalition of agricultural groups.
Tom Sell response in full
"While Heritage puts out some thoughtful work on many subjects, their studies on agriculture policy are the same old recycled, detached, ivory tower babble.
"Thankfully, most of the Members of Congress they are trying to influence know some farm families. They know they work incredibly hard and take on extraordinary financial risks to do important work that is of intrinsic value to our society. They know that growing crops for a volatile and distorted world market is more risk than most Americans would be willing to take on. They know family farms are better equated to small businesses than wage earners. They know the farm policies that Heritage's 65 pages of ink try to demean represent one quarter of one percent of the federal budget and that the risk of getting this area of policy wrong is far greater than this small cost, which has fostered the most productive and dynamic agricultural sector in the history of the world.
"In a nutshell, Congress and the American people have rejected these aloof arguments in the past and we have no reason to believe this reprise will change that."
We are working on a more detailed response for Farm Policy Facts (www.farmpolicyfacts.org) to address some of the particular problems with the Heritage study. We just wanted to forward this along this morning so that you know we are in the fight.
Stand proud. Thanks as always for what you do.