The Farm Bill: It’s About Food Stamps And Subsidies

“Do as I say, not as I do” is not a mantra that GOP who claim to be supportive of “smaller government” or “fiscal sanity” should employ. And yet…we have the Farm Bill.

The Federal Agriculture Reform and Risk Management Act of 2013 is essentially made up of two things: pork subsidies and food stamps. The last Farm Bill was passed in 2008 and contained an enormous amount of subsidy for ethanol fuel production. S.R. Mann here at Pocket Full of Liberty wrote an article about the Corn Behemoth, which benefited the most from the 2008 Farm Bill. Imagine: people are literally starving in the world, and America pays farmers to burn corn.

But I digress…

Fast-forward to 2013, what is contained in the Farm Bill? Well, 80% of the bill will go to SNAP. That is, food stamps. Cato does a good job trashing the Farm Bill food stamp costs, which it estimates at $80,000,000,000 per year. $80 billion. That’s a lot of money. The reason for that? In Obama’s economy, approximately 48 million people receive “SNAP Benefits,” or food stamps. That’s an increase of 15,000,000 folks since Obama took office in January 2009.

If there is one theme I have tried to hammer home repeatedly, it’s this: government intervention screws up the free market. This is most definitely the case with the “Farm Bill.” How so? Well, first of all, it should be noted that these subsidies go back to the Great Depression, where FDR wanted to prop up the price of farm goods so (in theory) farmers would grow crops to sell for a profit. Today, there is literally no reason (except for cronyism) to prop up “Big Farming.”

First, Cato notes that over a billion dollars per year goes to farms that are not actually farms. Second (and more importantly), is the fact that the world simply does not have an oversupply problem when it comes to agricultural products. Commodity prices, despite any recent Bernanke-inspired pullbacks, are relatively high. In today’s globally integrated world economy, there most certainly is a market for agricultural goods. In other words, if the demand does not exist in the United States, the crops can be shipped to China, India, or other dense population centers for export. Cato also notes that farm subsidies raises the price of sugar and dairy products, which actually hurts the American consumer.

Imagine that. The government, in its infinite wisdom, artificially hikes the prices of two of the major products purchased by food stamps, thus costing the taxpayer even more than if the market was more free.

The kicker from Cato comes from this post, where they essentially “Spendthrift Shame” GOPers who laud the Farm Bill, but grandstand about “balanced budgets.”

Rep. Mike Conaway: “Our nation is in a budgetary crisis. Last year, the federal government borrowed about 40 percent of all the money it spent. And today, our national debt stands at more than $16 trillion, with more than $5 trillion added in the past four years. As a CPA and fiscal conservative, I am committed to working with my colleagues to cut spending and put our fiscal house in order. Congress does not have a blank check; it is vitally important that we balance the federal budget.”

Rep. Austin Scott: “Washington continues to spend at unsustainable levels … We owe it to our children and grandchildren to make the tough choices and devise a long-term solution that gets our economy back on track and reduces our deficits.”

Rep. Rodney Davis: “Today, our debt is growing faster than our economy and Washington’s promises are growing faster than its ability to pay for them. Regardless of political party, this is completely irresponsible. Our nation is facing the greatest debt in its history–a debt that we will pass along to our children and grandchildren if not addressed. This is a crisis that we cannot ignore any longer. It is a crisis that will require us to look at all areas of our government, defense and non-defense, to get our spending under control.”

Rep. Steve King: “We must also balance the federal budget … and I plan on fighting every day here in Congress to reduce federal spending and get our nation’s fiscal house in order.”

Rep. Rick Crawford: “Out-of-control government spending is a byproduct of a broken Washington. For far too long, Republicans and Democrats alike have operated under the false assumption that they can spend their way into prosperity… I was elected to office to end Congress’s reckless spending spree and chart our country on a better path. Let me be clear: Congress has a spending problem, not a taxing problem. We cannot continue to finance these bad spending habits by borrowing from foreign countries like China, and sticking our children and grandchildren with the bill. We cannot continue to swipe the nation’s credit card and live beyond our means… As long as I am a Member of Congress, I will remain committed to reining in government spending, balancing the budget, and returning to our nation’s founding principles of limited government.”

You can’t have it both ways, gents. When you talk about the fact that the federal government spends too much, but want to spend a trillion in food stamps and subsidies, you’re part of the problem.

The irony is that the Farm Bill died because some who supported fiscal sanity (and voted against the Farm Bill) essentially teamed up with those who thought the Farm Bill did not spend enough. Politics makes strange bedfellows, indeed.

It’s almost laughable when Obama issues a veto threat over the Farm Bill’s perceived “cuts” in food stamps. Congress passed a gigantic $640 billion Farm Bill in 2008, over presidential veto. However, since the economy tanked, we’re spending more than originally budgeted in 2008. Even with this in mind, the latest Farm Bill increases spending over the 2008 bill and keeps it at the levels that we are spending today. However, to make it appear to be “tough” on spending, the “cuts” that Obama issued the veto threat over are actually cuts in the baseline budget, which is essentially an accounting trick. Bottom line: this bill cuts nothing, spends way too much, and warps the markets, which increases costs for everybody.

Same as it ever was.

As always, free markets are better markets.