The 2014 Farm Bill that was supposed to save $23 billion over 10 years will cost taxpayers much more due to subsidy payments, according to reports compiled by the Environmental Workers Group.
The bill was supposed to reduce costs by offering crop insurance that protected farmers when crop yields failed, and eliminated subsidies, according to the Senate Committee on Agriculture. The $956 billion bill replaced a system known as direct payments subsidies with a combination of extensive crop insurance programs which were promised to be cheaper, alternatives.
The system is not working as intended. Analysis of corn and soy subsidies in 2014 and 2015 reveal far higher subsides than Congress predicted. The two new subsidy programs, the Agriculture Risk Coverage-County (ARC-CO) and Price Loss Coverage (PLC), actually cost $5.2 billion in subsidies in 2014, more than any year since 2005.
“Continued decreases in prices are the main reason for the relatively high ARC-CO payment estimates,” according to a recent report from Farmdoc Daily. In a 2014 study, Farmdoc Daily found more than 90 percent of corn and soybean farms received some form of payment.
In January, 2016, the Congressional Budget Office estimated ARC-CO and PLC payments would cost $19.7 billion between fiscal years 2016 and 2018, which is 70 percent more than it estimated when the Farm Bill was passed in 2014.
“Replacing the problematic direct payment program with new, expensive farm subsidy programs was not reform,” the Environmental Workers Group wrote. “Taxpayers need real reform in the next farm bill to get them out from under the costly burden of these programs.”
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