Sen. Pat Roberts Was Right: Farm Subsidy Costs Soar by More Than $10 Billion

Friday, January 27, 2017

Sen. Pat Roberts of Kansas, now chair of the Senate Agriculture Committee, opposed the 2014 Farm Bill because of the projected cost of new farm subsidies. At the time, Roberts said the bill was a "march backwards" that would mean more spending and waste.

Roberts was right. But it's even worse than he expected.

New budget forecasts released this week by the Congressional Budget Office show that the cost of commodity farm subsidies through the end of the farm bill will be almost $11 billion higher than originally projected. When the farm bill was passed, these programs were supposed to cost $14.6 billion from 2016 through 2018, but now they will cost almost $25.6 billion.

The main culprit is the Agricultural Risk Coverage county-level subsidy program. Payments under the ARC program are forecast to go from $4.5 billion in 2016 to $6 billion in 2017, and then back down to $4.7 billion in 2018. The budget office expects ARC payments will continue to decrease after 2018, but payments through the Price Loss Coverage program will rise.

The Price Loss Coverage program is what stopped Roberts from supporting the farm bill. He said that by setting high fixed-target prices that guarantee overproduction, the program was "a classic government subsidy mistake." The new predictions back him up: Overproduction lowers crop prices, resulting in an increase in payments to farmers.

As Congress begins holding hearings on the next farm bill in the coming months, members should heed Roberts' warning and reform these commodity programs. 


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