Coalition Endorses Agriculture Subsidy Reforms

Today, the Coalition to Reduce Spending is proud to join 9 other fiscally conservative organizations urging Congress to cosponsor and support two Farm Bill reforms that would save billions of taxpayer dollars.

Sponsored by Sen. Jeff Flake (R-Ariz.) and Rep. John Duncan (R-Tenn.), the Harvest Price Subsidy Prohibition Act (S. 2096, H.R. 4305) and an amendment to the Agriculture Act of 2014, would protect taxpayers from being forced to subsidize costly and wasteful portions of the federal Farm Bill program.

As the letter notes, the Harvest Price Option is one of the most troubled aspects of the Farm Bill program.

A standard crop insurance policy locks in a guaranteed level of revenue at planting time, and when Congress designed crop insurance as a safety net for farmers, this is the system they intended to create. The HPO, which is rightfully known as the “Cadillac” coverage option, differs by paying farmers using either the standard locked-­in price or the market price at harvest – whichever is higher. HPOs can actually result in a farmer’s revenues exceeding the expected revenue when the crop was planted.

Additionally, the coalition letter describes the amendment to the Agriculture Act of 2014:

Similarly, eliminating “double dipping” on the collection of farm subsidies is another much-needed reform. The legislation requires choosing between Price Loss Coverage (PLC) or Agriculture Risk Coverage (ARC) under Title I or federally subsidized crop insurance policy programs under Title XI. In 2014 and 2015, the ARC and PLC programs paid out a combined $13.1 billion in subsidies, while the revenue-based crop insurance program paid out over $10 billion for the same crops. Subsidizing twice for the same losses is another obvious area of waste to address.

While few would dispute the need to look out for small family farmers, there is little defense for putting taxpayers on the hook for paying billions of dollars in double payments.

We commend Sen. Flake and Rep. Duncan for their leadership and hope to see additional cosponsors and action on both pieces of legislation.

The letter, which can be read in full here, was signed by the following organizations:

Coalition to Reduce Spending
R Street Institute
Campaign for Liberty
Center for Individual Freedom
Council for Citizens Against Government Waste
FreedomWorks
Independent Women’s Voice
National Taxpayers Union
Taxpayers for Common Sense
Taxpayers Protection Alliance