Jeremy Hobson: The federal farm bill expires at the end of this month, and it appears that rather than passing a new one right now, Congress will extend the current law for a few months until after the election. That means lawmakers will put off decisions, like whether to replace direct subsidies for farmers with new forms of support.
But David Nogueras reports that those new programs could wind up costing even more than the current one.
David Nogueras: Greg Horner isn’t paying much attention to Congress these days. He’s got pumpkins to harvest. Horner is manager of operations at Deep Run Farms in Carroll County, Maryland. He says his farm receives federal subsidies on its corn and soybeans, but a change in federal programs wouldn’t have that much of an effect.
Greg Horner: We’re not a huge farm, you know the larger your farm, the more subsidies you’re going to get.
Economist Vincent Smith says that could well be true. He’s a co-author of a new paper from the conservative American Enterprise Institute.
It crunches the numbers on a new a supplemental insurance program in the House bill. Smith says, if commodity prices remain high, that program would cost a little more than a billion dollars. But, he says if those prices slide toward their historical averages…
Vincent Smith: The taxpayer would be on the hook for $18 or 19 billion a year, and that’s a lot of money.
Smith says there’s another risk. Both bills arguable create incentives for farmers to increase production. That could violate current U.S. commitments under existing trade agreements.
I’m David Nogueras for Marketplace.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.