The Senate passed a 5-year farm bill Tuesday 68-32, after nearly 3 years of congressional conflict over future agriculture policy. The House passed the legislation last week with a 251-166 vote, and the President is expected to sign the bill this Friday.
The bill contains some improvements but does not go far enough in curbing overly generous subsidies, especially for wealthy individuals and large agribusinesses. In fact, the legislation increases some subsidies.
The Congressional Budget Office estimates the legislation will save $16.6 billion over 10 years. Some experts, however, say the bill’s subsidies could be more expensive than anticipated and could make the farm programs even more generous than ever.
After this year, direct payments to farmers — including those made regardless of whether crops were even planted — would end, saving nearly $41 billion over 10 years. Unfortunately, an estimated $27.2 billion will be spent on two new programs to subsidize farmers against revenue losses or price declines.
The bill also adds almost $6 billion to crop insurance subsidies over 10 years, increasing their total cost over that time period to nearly $90 billion.
About $8 billion in savings will come from the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps. Although this is less than House members originally sought, the legislation arguably demonstrates a leniency towards major industries that is not shown to SNAP recipients.
Elected officials should reconsider some of these overly generous features of the new legislation. It would make sense, for example to means-test crop subsidies and reduce the government’s financing of insurance.
CBO Cost Estimate of Farm Bill