November 10, 2012 by brooksy
The question presented is: how can one defend the existing budget to food assistance programs, but I beg the question, how can we justify direct payments to farmers that total about $5 billion. Farm income was $101 billion in 2011 (1). That’s way more than the $80 billion for the entire food stamp program (2).
If we’re going to be objective about where farm bill money gets distributed, then let’s look at where the economic and social needs are. If you look at where money is going and why it’s going there, then it gives you a lot more insight into motives behind farm bill spending allotments.
The farm bill is not much more than an entanglement of government programs that have very little to do with each other. It seems like a great way for the USDA to continue to feel ‘needed’ in an era where farming has become like cassette tapes among industry’s MP3s. So it needs to redefine itself to include things like SNAP and environmental protection in order to avoid obsoleteness.
The Farm Bill is important because SNAP, along with other food and nutrition programs, is authorized and funded through this bill. SNAP is one of the seven strategies essential to meeting the goal of ending childhood hunger by 2015, and the Farm Bill is an opportunity to make needed improvements to SNAP that will help America reach that goal(5).
With the proposed cuts, two to three million people would lose their food stamp benefits. Nearly 300,000 children would also be ineligible for the free lunch program (1). This sounds like a sick and twisted strategy to combat childhood obesity.
Reductions are estimated to be about $90 per family and affect 500,000 households in 15 states (1). Cuts will have a huge impact on low-income families during a time of high unemployment. This is not the right climate to be reducing food assistance programs.
The bill includes income support to growers of selected commodities (i.e. corn for our soda sugar and ethanol, oh and to please Iowa so that politicians can keep support during caucuses (7) , keeping Brazil’s corn and Cuba’s sugar out of things (8), and feed grains so companies like Tyson can save on its chicken feed. Tyson received 2.59 billion from 1997 to 2005 (3). I wonder how much feed that buys. The subsidy keeps the cost of what we Americans have come to call ‘chicken’ low, but cut the SNAP program budget until people who need food assistance programs can’t afford to buy the cheap chicken concoction anyway.
To ensure that the bill passes, they have included components for a spectrum of areas including SNAP, international food aid and bioenergy to name a few(4). Everyone’s got a piece of the pie now, so no one wants to nix it—the pie that happens to have subsidized ingredients, so costs for crops stay low (farmers lose), thus costs for businesses stay low (businesses win). It’s in everyone’s interest to pass the bill, plus who would want to take food (cheap pie, in this case) out of someone’s mouth?
Well, where is the evidence that SNAP is effective?
It’s right here:
USDA’s ERS data shows that SNAP significantly improves the welfare of low-income households. They found an average decline of 4.4 percent in poverty prevalence due to SNAP benefits. SNAP benefits had a particularly strong effect on child poverty, reducing its severity by an average of 21.3 percent from 2000 to 2009 (6).
SNAP is benefitting nearly 50 million Americans, whose incomes, by the way, are well under the average $30,000 that a farmer makes. If included in total income SNAP benefits would have lifted 3.9 million Americans—43% children–above the poverty line in 2011 (9).
What about evidence for farm subsidies?
Big business ‘farms’ get 45% (top 7% of farmers, average income of more–way more–than $250,000) of the farm subsidy (7). Whoa cowboy, hold your horses. Where are the economic and social arguments for supporting that?
The largest farms with the most revenue get nearly half of the subsidy? I bet those cowboys have some real fancy boots.
An average income high of $89 billion for the year of 2008 (which was 40% higher than the previous 10 year average) was used to set the ‘baseline’ income level (8). So the insurance subsidy guarantees 75-85% of that income. Thanks, lobbyists. $116 million was spent on lobbying among agricultural interest groups (1). How is this sort of spending justified? Who is lobbying for SNAP?
If we compare programs, SNAP qualification is 130% of poverty level (e.g. 1 person household is $11K) as defined by HHS (10), which could provide at most about $2400/yr, about $200 per month, which is meant to supplement 30% of food costs.
The average Farmer receives $8,600/year from the subsidy (this varies greatly depending on crop, farm size, etc, but for argument’s sake let’s say $8600 (11) for a range of incomes (everyone from the small farm of about $30K/year up to 750K (1).
Currently, the government subsidizes about 62 percent of the crop insurance premiums, and the policies typically guarantee 75 percent to 85 percent of a farmer’s revenue (2). What is sustainable about this system? And why is the farm subsidy not under the same scrutiny as food assistance?
Food for thought:
Let’s restructure the bill so that the top 7% aren’t benefiting from crop subsidies, or maybe create something that keeps farms from monopolizing crop sectors. Maybe we could call it something catchy like Antitrust Act.
Having said all of this, I realize by decreasing subsidies on commodities that food prices would increase, and SNAP would obviously be affected. But would health be impacted because the subsidized crops (grains and feed vs. fruits and vegetables) are usually the ones found in the cheap industrial foods?
The arguments for SNAP spending make sense economically because it has shown to be effective. It also makes sense morally, although since when does the government consider ethics with social welfare when deciding who in society should benefit financially, right Romney?
To learn more about the Farm Bill:
- House Agricultural Committee agrees of Farm Bill, but….
- Senate passes farm bill, but delays expected in the House
- What is the Farm Bill?
- What the proposed 2012 Farm Bill might mean for Food Assistance Programs
- Cardello, Hank. Stuffed. 2009
- Food Politics What everyone needs to know (R. Paarlberg), Chapter 9