As Congress scrambled last week to avoid a government shutdown, the Farm Bill, a piece of legislation passed every five years, expired, leaving millions of farmers wondering whether to expect a renewal of its various programs. While some will continue due to their presence in other appropriations, many have been stopped while Congress negotiates a new bill over the coming months.
The bill, which includes programs like crop insurance, SNAP benefits, and other support for agriculture across the country, lapsed this year because Republicans and Democrats couldn’t right-size spending in the final product. Because of the importance of the bill to America’s farming industry, it’s likely that Congress will return to the drawing board once the drama from Speaker McCarthy’s removal cools down. But there needs to be a concerted bipartisan effort to fix the issue that held up this year’s bill: managing the budget.
Many Democrats dropped support of this year’s Farm Bill out of disagreement with Republicans pushing for more work requirements for SNAP recipients. Republicans pushed back, calling to reduce SNAP which currently consists of 76% of the roughly $428 billion spent through the 2018 legislation. With SNAP’s portion of the 2023 Farm Bill estimated to grow to 84%, Republicans are right — there have to be new measures to keep costs controlled.
Legislators in favor of right-sizing have the right idea: If the bill is going to benefit farmers in the long-run, lawmakers must trim the fat. But merely reducing SNAP benefits won’t solve the broader problem of the bill’s inefficiency. It’s not just excessive benefits, but the loopholes allowing high-income agribusiness to take advantage of the Farm Bill’s subsidies that have truly driven spending out of control. Rather than eliminating specific programs, lawmakers must work together to eliminate the bill’s inefficiency, tightening requirements throughout to reduce financial mismanagement and waste.
According to a report from the American Enterprise Institute, 20% of the largest farms in the country receive 80% of federal subsidies to purchase crop insurance. There are no caps and eligibility restrictions on these subsidies, with some millionaires and billionaires racking in federal cash. A loophole in the Farm Bill extends subsidies to family members engaged in farming: $125,000 in subsidies can be given out if a family member has one simple call with another about what to plant. This has resulted in almost 20,000 farmers receiving $18.5 billion in subsidies over the last 37 years.
The surest way to remove waste from the bill would be to add new eligibility requirements and caps for subsidies and crop insurance that prevent the wealthiest farmers from exploiting the funding. Only 30% of farms grow crops eligible for the current subsidies, not to mention many of them aren’t receiving subsidies or subsidies to the scale of the biggest recepients. Reforming eligibility requirements to account for a farm’s size would allow that money to go towards more crops at a time, and to farms that truly need the help.
Apart from these needed amendments, there is room to improve SNAP’s efficiency and reduce waste without affecting the services it provides to 42 million people.
Since 2019, the USDA has advocated for the categorical eligibility loophole that creates SNAP eligibility if a person also qualifies for other welfare programs such as Temporary Assistance for Needy Families (TANF) or State Maintenance-of-Effort (MOE) funds. This drastically increases the number of people who can receive SNAP, often beyond the truly needy. A case in point is one Minnesota millionaire who enrolled into SNAP to demonstrate the loopholes. Other measures like reducing fraud, overhead program administrative costs, and other factors all add up to save billions of dollars.
SNAP historically has struggled with sending money to efficient work training programs. After the 2014 Farm Bill, only two of ten pilot programs reported increased employment. Similarly, states can exploit work requirement waivers from SNAP: Half of able-bodied adults without dependents receiving SNAP live in areas whose work requirements are waived due to high unemployment. This waiver originally intended to deal with economic downturns, but has a self-fulfilling effect of making areas with high unemployment due to poor economic conditions exempt from work requirements for their welfare, creating a dependency.
When explaining how he froze tuition at Purdue University for 11 years, Former Indiana Governor Mitch Daniels described a budget like a marbled piece of meat: There’s fat everywhere, and it’s a matter of cutting off waste wherever that exists. This analogy is perfect for what needs to happen with the Farm Bill. There needs to be a bipartisan consensus that yes, there is room to operate more efficiently.
As it is now, the Farm Bill offers subsidies for millionaires and faulty implementation of welfare that captures beyond the truly needy. Only in rightsizing the Farm Bill can it benefit ordinary people from the farm to the grocery store.
