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Major Setback for Taxpayer Handouts to Big Ag

By David Rosenfeld
Executive Director

The U.S. House of Representatives voted down the Farm Bill this morning, and I'm darn glad they did. 

OSPIRG opposes the House Farm Bill (H.R. 1947). Like the Senate’s proposed Farm Bill, this legislation would keep the gravy train flowing for big agribusiness, locking in their unjustified corporate handouts for the next five years. With Congress focused on how to fix the budget, our elected leaders shouldn’t squander the opportunity to cut off these outrageous giveaways to Big Ag once and for all. See below for Five Ways the Farm Bill Brings Home the Bacon for Big Ag.

Shortly before the entire bill was rejected, we came SO CLOSE to passing an amendment to reduce subsidies for the most profitable agribusinesses. The Kind-Petri amendment, which would have cut off certain subsidies for agribusinesses with high incomes, failed with a narrow 208-217 vote. Kudos to Reps. Blumenauer, Bonamici, DeFazio and Schrader for supporting this amendment. Unfortunately, Rep. Walden voted against this amendment (Given that 90% of Oregon's farms don't get a dime in subsidies, and most of the subsidies go to just 4% of all farms, I sure wish I understood why he sided with Big Ag). 

I have no idea what will happen next, but suffice it to say, this is a major setback to Monsanto and the rest of the Big Ag lobbying crew. The dynamics get more interesting because President Obama announced earlier this week that he will veto a Farm Bill that doesn't include more funds for food stamps - paid for by deeper cuts in Big Ag subsidies.

Suffice it to say, this is a win for everyone out there who has been beating the drum about these wasteful subsidies, so let's keep it up. It ain't over till it's over.

Read on for Five Ways the Farm Bill Brings Home the Bacon for Big Ag

1) Big Ag’s bait and switch

The House Farm bill eliminates the “Direct Payments” program — long the poster child for wasteful agricultural subsidies, known for handing out checks to rich landowners who don’t even farm. But in a political sleight of hand, the bill plows more than half the savings from cutting Direct Payments to a new subsidy program that will continue to do more of the same by giving handouts to large agribusinesses that don’t need our tax dollars.

This new “Price Loss Coverage” program guarantees agribusinesses 85 percent of the revenue they received in these previous years, locking in the record-high prices of recent years. A study commissioned by the Environmental Working Group found that if prices fall, the new program could cost taxpayers $20 billion more over the next decade than the discredited Direct Payments program. 

 

2) Big profits mean big subsidies

Since 1995, just 4 percent of agribusinesses have made off with three-quarters of the subsidies. Yet the House bill rejected modest measures to reduce or eliminate subsidies for agribusinesses with high incomes. For millionaire farmers, the checks will keep on coming. 

 

3) No caps mean million-dollar checks

Both the House and Senate rejected bipartisan measures to put any sort of cap on how big a check an agribusiness can receive to help pay its insurance bill. Currently, taxpayers pay over 60 percent of the premiums for agribusiness insurance, which compensates them for poor yields, price declines, or both. On top of that, taxpayers pay 15 private insurance companies $1.3 billion to run these programs. 

Because the program has no caps, just 26 agribusinesses have received more than $1 million in a single year, while 80 percent of farms get $5,000 on average, according to a study from the Environmental Working Group. 

Instead of reining in this program and capping how much agribusinesses can receive, both the House and Senate bills actually expand it. 

 

4) Paying to market Big Macs and underwear abroad

The House and Senate bills make no changes to the $200-million-per-year Market Access Program, which subsidizes ad campaigns for giant agricultural companies and their trade associations. The House strongly rejecting an amendment to end this program. Companies receiving this funding have ranged from McDonald’s to Fruit of the Loom. Taxpayer money has even been used to pay for a reality TV show in India to promote cotton. Companies are perfectly capable of buying their own airtime — they don’t need taxpayer dollars to subsidize their ads. We’re disappointed that every member of Oregon’s congressional delegation voted to protect this misguided program.

 

5) Subsidizing junk food

At a time when America faces an obesity epidemic, billions in subsidies underwrite the production of junk food additives. Between 1995 and 2011, U.S. PIRG research found that $18.2 billion subsidized four common junk food additives, including high-fructose corn syrup. That’s enough to buy every kid under 18 in the U.S. eight 2-liter bottles of soda every year. By contrast, the subsidies for apples — the only fruit or vegetable that gets significant subsidies — would pay for less than half of an apple for each taxpayer every year. 

Neither the House nor Senate Farm Bill makes meaningful reforms to correct this imbalance in our food policy.

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