Republicans have cut farm program benefits again

In the 1980s and 1990s Democrats offered some great proposals for farm bill reform that managed supply along the lines of the original New Deal programs, protecting both farmers and consumers, and with no subsidies needed, freeing up money for better uses. In contrast, between 1984 and 1989, the Republican’s 1985 Farm Bill decreased the minimum price floor for corn by 90 cents per bushel while increasing potential subsidies by only 71 cents, (a 19-cent reduction). That was their response to the farm crisis. They could spin their reductions as “pouring money into the farm economy.”

In 1996, Republicans ended price floors and called for also ending farm subsidies by 2002. Farm prices quickly crashed to the lowest levels in history, thus serving as a huge de facto subsidy for Confined Animal Feeding Operations, (CAFOs,) and they were forced to pass four emergency farm bills prior to 2002, increasing subsidies, but not restoring the New Deal approach, even at the low, 1995 level. Without supply management, record low prices continued for the major crops. All of these changes made feed grains and soybeans available to CAFOs at prices cheaper than farmers could raise them, and as a result, most farms in Iowa lost all value-added livestock to CAFOs, and resulting from that, most Iowa farms lost all of the sustainable livestock crops, grass pastures and clover and alfalfa hay, damaging water quality.

Today farm debt is at a record high, and input costs have risen dramatically due to the pandemic and other factors. In response, Agriculture Committee Republicans added farm bill provisions to the big budget reconciliation bill. Iowa House members are claiming they increased subsidy triggers, (Reference Prices,) of the Price Loss Coverage (PLC) program. As it turns out, they didn’t do the math correctly. They didn’t adjust for inflation. The PLC standards stayed the same for 2014-2024, so adjusted for inflation they went down every year. While the new Republican changes look like increases, (i.e. $3.70/bushel for corn raised to $4.10 for 2025 and $4.20 by 2035,) adjusted for inflation in real 2014 dollars, (the year the program started,) the $4.10 starts at just $3.08 for 2025, and falls to just $2.59 by 2035, (figured using projected inflation values from the Congressional Budget Office). So by 2035 the PLC corn standard falls to just 70% of the original 2014 standard, below the 2024 level of 77%.

It should be noted that, in the 2014 and 2018 farm bills and the new changes in the budget reconciliation bill, southern members of Congress won significantly higher PLC Reference Prices for peanuts, rice and cotton seed than did the members of Congress from Iowa and other Midwestern states. The southern crop standards for PLC were above the full costs of production, not below.

The Republicans also increased a calculation factor for the Agricultural Risk Coverage Program, (ARC,) from 86% to 90%. Those calculations also become reductions, however, in just 3 years. ARC is more irrational than PLC, and can pay farmers a lot when they don’t need it, or pay farmers nothing when they do need it. For example, after corn prices fell from $4.46 in 2013 to $3.36 in 2017 and 3.61 in 2018, (well below the full cost of production,) only 12 Iowa counties received any benefits in 2017, and only 7 in 2018.

Turning farm programs into welfare programs has been a disaster for farmers and the environment. It has led repeatedly to Republican greatly reducing farm program benefits while claiming to have increased them.

Brad Wilson has worked on farm bill issues for more than 40 years, including as a Farm Policy Specialist for Iowa CCI and as an Executive Committee board member of the National Family Farm Coalition. He lives in Springville.