To the People

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or TO THE PEOPLE.

Wednesday, May 21, 2008

Subsidy Crop Looking Mighty Green This Year

Think the Farm Bill that Congress recently passed is bad? Guess again. It is even worse:
A major new program in the recently enacted farm bill could increase taxpayer-financed payments to farmers by billions of dollars if high commodity prices decline to more typical levels, administration and congressional budget officials said yesterday.
***
The final details of the new program were approved at the end of four months of House-Senate negotiations over the legislation and received almost no attention during floor debate last week. The voluntary program guarantees farmers a subsidy if they suffer losses because of low prices or poor crops.

Since the amount of the subsidy for 2009 is tied to recent record prices, farmers could reap a windfall if prices drop suddenly.

"I don't think many people on the House side who voted for the farm bill realized there were $16 billion in potential higher costs in there," said Deputy Secretary of Agriculture Charles F. Conner. "The budget exposure is tremendous."

A blog item posted Monday by the agricultural magazine Pro Farmer described the new program, known as Average Crop Revenue Election (ACRE), as "lucrative beyond expectations," and said it is a "no brainer" for farmers to sign up for it.

The Agriculture Department estimates that subsidy payments to corn farmers alone could reach $10 billion a year if prices -- which have been $5 to $6 a bushel -- were to drop to $3.25 a bushel, a level seen as recently as last year.

Read the whole story here.

The White House has said it would veto the bill, a meaningless gesture since it passed with bipartisan majorities large enough to override any veto.

In short, if food prices stop their current steep rise, we'll still pay the same. It'll just come out of our tax dollars.

Labels: ,