In recent testimony before the House Committee on Agriculture, United States Department of Agriculture Deputy Under Secretary Alexis Taylor confirmed that new agriculture income entitlement programs created in the 2014 farm bill are proving much more costly than originally promised.

“Given the significant drop in commodity prices since passage of the farm bill, our current projection is that about $6.5 billion in 2014-crop payments will be made, largely to corn producers who signed up for ARC.”

If these estimates hold true, the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs will be 73% (almost $3 billion) more expensive than originally predicted in just their first year of operation.

It comes as no surprise that the ARC and PLC programs are proving more expensive than promised. Based on outdated price assumptions and riddled with accounting gimmicks, Taxpayers for Common Sense warned that the $16.6 billion in deficit reduction estimated from passage of the 2014 farm bill was unlikely to occur. Adding insult to injury, $6.5 billion is nearly $2 billion more than what would have been paid to farmers under the discredited direct payments program that these programs replaced.   

Skyrocketing costs in the ARC and PLC programs are just the most recent evidence that the 2014 Farm Bill will fail to save tax dollars as its defenders vociferously claimed. Comparing the baseline cost of federal agricultural support programs as calculated before adoption of The Agricultural Act of 2014 to the actual FY14 spending on major agricultural programs also shows significant cost overruns.

In a bill as large as the farm bill, cost increases in one program may be somewhat offset by savings from other farm bill components, like conservation or nutrition assistance. But the bottom line is taxpayers are likely on the hook for billions more than originally estimated as the Congressional Budget Office (CBO) has a poor track record predicting the costs of farm bills.

Taxpayers should not be spending billions of dollars on special interest programs designed to prop-up the incomes of certain agricultural businesses. Reining in the significantly over-budget ARC and PLC programs is a necessary first step to building an adequate, effective, and efficient agricultural safety net that taxpayers can afford.

Photo credit: United Soybean Board via Flickr