Four months after the President signed the near-trillion dollar farm bill into law, the U.S. Department of Agriculture (USDA) is busy writing rules and regulations to shovel out cash. That should have taxpayers grabbing for their wallet.  Last month the agency announced they were in the implementation weeds of at least 55 programs, reports, and studies for everything from catfish inspection and cotton trust funds to studying the marketability of U.S. Atlantic Spiny Dogfish and conservation of the Lesser Prairie Chicken. Notably absent was any progress on the handful of provisions that might actually save taxpayer dollars.

The 2014 farm bill was a missed opportunity. Instead of paying down our deficit with savings from eliminating wasteful, outdated, and ineffective programs, the farm bill created a whole new alphabet soup of agribusiness income entitlement programs – Agriculture Risk Coverage (ARC), Supplemental Coverage Option (SCO), Price Loss Coverage (PLC), and Stacked Income Protection (STAX) to name a few. These so-called “shallow loss” programs differ in their details, but share one common goal – making the record farm profits of the last few years the new normal and forcing taxpayers to foot the bill. These programs only add more layers to the subsidy sandwich which already includes highly subsidized crop insurance for more than 120 crops; this number will soon balloon as Congressional mandates for “priorities” such as sugarcane, swine, and sorghum (used as a bioenergy crop) increase the program’s scope.

Understanding how these programs will work in the real world is really complicated. A USDA one-pager on ARC, PLC, and cotton transition payments (another name for the old discredited direct payments that were supposedly eliminated by the farm bill) – used four colors, 1264 words, and size 5.5 font to describe payment acres, yields, and formulas. Apparently lacking confidence in the utility of this one-pager, USDA just dispensed $6 million to universities, extension offices, and even a crop insurance consultant to create “decision tools and educational materials” designed to tell producers how to squeeze the most money out of the programs. (Flashback: TCS’ 2012 Golden Fleece which targeted a similar USDA program for spending taxpayer dollars on Christmas trees, turf grass, and goldfish instead of promoting unsubsidized, private sector risk management options).

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Because creating a menu of options and spending millions on tools to help agricultural producers navigate that menu wasn’t enough, the USDA is rolling out the rules for the shallow loss programs in a way that will allow producers to maximize taxpayer-subsidized payments. These programs require a one-time decision that is binding for the next five years. But USDA has pushed the election deadline to late 2014, delaying enrollment until spring 2015. This means most producers will be picking their “safety net” for their 2014 crops after they’ve already harvested and sold them. It’s like being able to make your poker bet after you’ve seen everyone else’s cards.

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Our fear that these programs will end up costing much more than predicted isn’t wild speculation. New USDA educational materials show that taxpayers’ worst nightmare may likely come true:  as current crop prices drop from recent historic highs, huge taxpayer payouts based on the reduction are the likely result. USDA estimates ARC will guarantee corn producers $5.35 per bushel, more than $1 above the current, break-even crop price. Five of eight other main commodity crops – corn, barley, oats, peanut, sorghum, and soybeans – will be in the same profit-earning boat, at least over the next few years.

As we’ve said time and time again, it’s not too late for policymakers to get out of the weeds, take a step back, and create a more cost-effective, transparent, and accountable farm safety net that is responsive to current market conditions and our nation’s fiscal situation. USDA can start by prioritizing our farm bill implementation recommendations (simple things like defining who is a farmer for farm subsidy purposes) instead of complicated schemes designed to harvest cash from taxpayers.

 

 

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