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For farm bill, ag groups say, ‘We want some more’

Net farm income is at record levels, thanks to high commodity prices, and is expected to remain strong for two or three years, yet farm groups are telling Congress “that existing subsidy programs should be continued, their scope expanded, and federal spending increased” in the 2023 farm bill, said an American Enterprise Institute analyst. “Perhaps the best that taxpayers can hope for is that spending on direct subsidies will not be increased.”

There is pressure as well to expand land stewardship and crop insurance programs, wrote Vince Smith, an economics professor at Montana State University, in AEI’s “Monthly Harvest” newsletter. Smith, a frequent critic of farm subsidies, questioned why agriculture was exempt from the “polluter pays” principle for achieving environmental progress, and said crop insurance “directs about one-third of all federal [farm] subsidies to private insurance companies.”

Farm groups say higher reference prices, used in calculating payments, are justified by record-high production costs. The crop insurance program needs reinforcement to help producers weather volatile commodity prices. The farmdoc daily blog discussed projected prices for the 2023 corn and soybean crops on Wednesday and said crop insurance could be used to set a floor on revenue. “Relatively high prices are needed to have profitability given significant increases in costs for 2023,” it said.

Farmers and ranchers faced $12.5 billion in crop and rangeland losses in 2021 from wildfires, floods, and extreme weather, said the American Farm Bureau Federation. Billions of dollars of the losses were not covered by crop insurance or USDA disaster relief programs, it said, looking toward the new farm bill. “While ad hoc assistance is a welcome addition in supporting farmers and ranchers, continued improvements to existing programs and crop insurance offerings can help fill gaps that leave some producers vulnerable.”

The Congressional Budget Office projected that crop subsidies would cost from $3.5 billion to $10 billion a year in the coming decade, stewardship programs would cost $6 billion annually, and crop insurance would also cost around $6 billion. Smith said that spending on land and water stewardship would increase to an average of $8 billion a year because of additional funding included in the recent climate, health, and tax law.

The bulk of farm bill spending — three-fourths or more — goes to public nutrition programs, most prominently SNAP.

“Other important issues include agricultural research and development funding, international emergency food aid, rural development, agricultural finance, and biotechnology deregulation,” wrote Smith. “However, direct farm subsidy programs will be a major issue in the 2023 farm bill debate.”

Considering the health of the farm sector, “there is no justification for any increase in farm safety-net subsidies to ‘save the family farm,’ ” he said.

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
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