Myth Busters Part 2 – Federal Spending and the Farm Bill

April 18, 2008

In the second installment of our ongoing series about the unsubstantiated claims by farm policy opponents, Farm Policy Facts will examine the notion that commodity programs break the bank.

Myth: Federal farm programs are outrageously expensive and U.S. Taxpayers would benefit from their elimination.

The Truth: Commodity programs have always accounted for less than one percent of the federal budget, and commodity program spending in the new farm bill is expected to be even less.

In fact, the Congressional Budget Office (CBO) projects commodity program spending for the new farm bill will be less than one-quarter of one percent of the federal budget – for each American that is about 25 cents out of every $100 dollars paid in taxes.

Put in more practical terms, U.S. farm policy costs American’s just 3 cents per meal or 9 cents a day.

Farm policies were created primarily to add a level of stability for producers who are directly tied to commodity markets notorious for their roller-coaster characteristics.  Without such stability, fewer farmers would farm and even fewer lenders would provide the operating loans necessary to cash-flow today’s farming operations.

U.S. farm policy is designed to provide more support when prices are low and less support when prices are high. This is why we refer to our farm program as a “safety net”. Over the life of the 2002 farm bill, farm program spending was actually over $25 billion less than projected because commodity prices were higher than projected. Not many federal programs can lay claim to coming in under budget.

Contrary to the rhetoric, increases in the new farm bill are not for the farmers, but rather for the broad array of programs beneficial to consumers, rural communities, the environment, and poor who need food assistance.

The 2002 farm bill increased by six fold our investment in conservation programs that support the stewardship for our working lands. The new farm bill builds on that investment with an additional $6.5 billion commitment to conservation programs.

It includes rural development incentives and doubles the investment in renewable energy initiatives that have helped create economic opportunity throughout America.

It authorizes research programs that will increase yields and productivity.

And of course nearly 70% of the farm bill funding is allocated to nutrition programs, providing food for those most in need – children, low-income families, and the elderly.

When you review the facts about farm policy, it’s clear how President John F. Kennedy came to the following conclusion:

“Our farmers deserve praise, not condemnation; and their efficiency should be cause for gratitude, not something from which they are penalized.”