Wednesday, October 30, 2013

What the Farm Bill (Crop Insurance & SNAP) Cost

Mother Jones reports that taxpayers are on the hook for climate-related disruption of US food production—mainly in annual outlays for crop insurance. In February 2013, the same month that the USDA released its bleak assessment on global warming, the Government Accountability Office released a statement warning about the federal government's "fiscal exposure to climate change," including the crop insurance program.

Based on USDA data, if the current version of the farm bill were extended ten years into the future, even without expansions under debate, crop insurance would cost $8.41 billion per year, or $84.1 billion total. With the expansions the projected costs rise to about $99 billion. And that figure does not account for recent climate-related impacts on crop yields, including the drought of 2011 and 2012 in Texas and the Midwest.

According to the Midwest Center for Investigative Reporting, taxpayer subsidies for crop insurance averaged $3.1 billion annually between 2000-2006, but have more than doubled to an average of $7.6 billion for 2007-2012.

Much of the fiscal bleeding has resulted from what's called a "harvest price option," an insurance option that compensates farmers for the revenue they missed when prices skyrocket amid climate-related scarcity. In the extreme weather since 2009 costs have tripled overall, rising every year from about $4.8 billion to the record high of more than $13 billion in 2012.

These increasing costs, at least partially related to climate variability, have called attention to the role of crop insurance in the farm bill. Under the new bill, the crop insurance program would largely replace traditional crop subsidies, becoming the main way taxpayers are asked to support farmers.

On Wednesday, a House-Senate conference will begin to reconcile two versions of the bill, both of which are strongly favored by agribusiness and insurance interests. Most of the politicking has long since been choreographed, as a range of lobbying reports and campaign contributions could attest.

The GOP wants to separate food stamps (SNAP) from the farm bill, to cut food stamps by almost half, but retain the farm subsidies. To put this into perspective:

$80.35 billion was spent on food stamps last year to feed 47 million Americans (about 2.27% of the federal budget) and in FY2012 we spent $676 billion for defense to protect 314 million Americans from foreign invaders and pirates --- not including our spy agencies ($53 billion estimated in the black budget) or our nuclear arsenal (budgeted under the Department of Energy) --- which one study estimates upgrades and maintenance to be at least $352 billion over the coming decade. Clearly "defense" is much more costly than feeding 15% of our poorest people or insuring our nation's crops.

Bloomberg reports that the Democratic-controlled Senate would cut $4 billion over ten years from food stamps in its current farm-bill version. The version passed by the Republican-led House, H.R. 2642, would cut $39 billion over a decade.

Meanwhile, a group of nine Democratic members of the House of Representatives held a press conference outside the Capitol on Tuesday to demand Congress avert a different food stamp cut that was already automatically scheduled to take effect this coming Friday.

But the Huffington Post reports that, that particular cut, which will reduce monthly benefits for all 47 million Americans enrolled in the Supplemental Nutrition Assistance Program by roughly 7 percent, is happening thanks mainly to Democratic votes that hastened the demise of a benefit increase from the 2009 stimulus bill. Each of the representatives at Tuesday's presser voted with their party for a pair of 2010 spending bills that set the cuts in motion.

Friday's cut is happening thanks to the expiration of a 13.6 percent food stamp boost from the American Recovery and Reinvestment Act of 2009, better known as the stimulus bill. Canceling the enhanced benefits this November means the government will spend $5 billion less on nutrition assistance next year -- an annual SNAP spending cut 25 percent larger than what House Republicans are seeking in farm bill negotiations starting this week.

As an aside: Senator Tom Coburn called Senator Harry Reid an "asshole". But who's the REAL asshole?

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