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How the “Farm Bill” Became a Misnomer

By: Contributor - Jan 20, 2014, 8:27 am

The US Farm Bill, pending in Congress, originally came about as temporary aid for farmers struggling in the Great Depression, but Congress has renewed it every five years since 1938. After lingering for more than 70 years, it has achieved near-permanent status — including crop insurance, farm subsidies, nutrition guidance, and some conservation programs.

World War I had given the United States an advantage in the world market for agricultural products, as farming was all but halted in many parts of the world. Once European producers were active again, however, US crops faced heavier competition. The supply of grain so highly exceeded demand that it became cheaper than coal, and was burned as fuel. Prices also dropped so sharply that there were some instances of South Dakota farmers having to pay grain elevators $0.03 per bushel to have their grain accepted. Orange farmers also sold crops at a loss.

Congress’s Econ 101 response was to order a decrease in the supply of crops. While many people were starving and couldn’t afford food, Congress was paying farmers to leave a percentage of their land idle. This may have also been a method designed to replenish soil in the Dust Bowl regions, but either way, Congress was asking farmers to produce less so that the farmers themselves would supposedly prosper.

Agriculture Secretary Henry Wallace finally caught on, and thus the Federal Surplus Relief Corporation was formed in 1933 to distribute any surplus. Unfortunately, that was not until hundreds of thousands of otherwise healthy cattle and pigs were purchased by the government and slaughtered, in the state of Nebraska alone.

Presidents Roosevelt and Hoover remained in bipartisan agreement over their somewhat surprising opposition to domestic relief, particularly in the form of food aid. It was only after strident criticism that Roosevelt permitted the distribution of meat to the hungry. He called direct relief “a narcotic, a subtle destroyer of the human spirit. . . . A cold and distant charity which puts out its sympathy only through the tax collector [and] yields only a meager dole of unloving and perfunctory relief.”

The very idea of redistribution was “radical” at the time, but, “necessity trumped ideology,” and Roosevelt supported the creation of the Food Stamp program in 1938. In four years, 20 million people started receiving food stamps, and according to the Heritage Foundation, food stamps now make up 80 percent of the Farm Bill’s almost US$1oo billion annual price tag.

Sources: Congressional Budget Office, Heritage Foundation.
Sources: Congressional Budget Office, Heritage Foundation.

Today, the Farm Bill is a collection of 15 bills that include many nonessential and unconstitutional items that have nothing to do with agriculture. Congress hastily cobbled together this omnibus bill in a time of crisis, and over time it has attracted scores of lobbyists and special interest groups seeking subsidies for their industries. According to Farm Bill 101, “the primary beneficiaries of Farm Bill programs are large farm businesses growing five main crops, including corn, soybeans, wheat, cotton, and rice.”

The bill favors large farms with enough political and financial pull to see their interests addressed. However well-intentioned the bill may have been, it has become a distorted mess of special interests. It is also incredibly outdated, despite being renewed every five years. As Farm Bill 101 points out, “the agricultural sector is much different than it was in the 1930s, yet U.S. policies have not conformed to these changes.”

This cumbersome and unsustainable policy is becoming a justifiable target, and even lawmakers are making compromises to ensure the bill’s survival. One measure under discussion is the creation of a “price or subsidy formula to send a market signal to farmers — not direct supply management.”

This is eerily reminiscent of Oskar Lange’s theory of market socialism, which proposed a “market-based” determination of prices through a central planning board. Oh the irony. While it would have been difficult to argue that the market would triumph during the Great Depression, today it hardly seems necessary for Congress to serve as a central planning board to ensure the well-being of US agriculture.

While a quick Google search yields hundreds of articles lamenting the potential rise in milk prices, if the Farm Bill is not renewed, these writers and concerned citizens fail to realize is that there is a cost to all of this cumbersome legislation. Even if indirectly, they are the ones footing the cost of this outdated and unnecessary bill.