It’s not likely that the word “overproduction” will feature much in this year’s farm bill debate. But in many ways, the status quo of overproducing corn, soybeans, wheat, rice, cotton and a handful of other commodity crops will be the final result of the politically charged process. Debates over the details about how government programs should support farmers who raise row crops—and the cumulative cost of these taxpayer-funded payments to private businesses—are currently stalling farm bill renegotiation in Congress.
For context, commodity prices for a handful of crops grown by the largest farms have been relatively high in the past few years. That means corn, soybean, rice, wheat and cotton growers have been receiving fairly high levels of income for their crops. At the same time, farm input costs have risen dramatically, as the prices for seeds, synthetic fossil fuel-based fertilizers, pesticides and equipment have exploded since the COVID-19 pandemic.
In addition to good prices, many of these large commodity-oriented farms have been boosted by a lot of federal aid, starting with President Trump’s trade war bailout and followed by COVID-19 crisis support. However, many economists are predicting falling commodity prices over the next few years. The biggest row crop farmers are expected to face some potential losses—but it is worth pointing out they still have more robust government support than most businesses in the United States.
To understand the primary logjam in Congress over the farm bill—commodity payments and government-supported insurance for row crops—it is important to understand how farmers producing these commodities are protected from losses. That begins with what are often called “crop subsidies.” These are outlined in Title I of the farm bill and give farmers some choices about how they are protected from bad harvest years or low prices. Farm bill insiders will discuss programs like ARC (Agriculture Risk Coverage) and PLC (Price Loss Coverage).
In addition to Title I subsidies, Title XI of the farm bill spells out the details of the Federal Crop Insurance Program, which subsidizes a wide range of farmers to buy private insurance to protect against yield, revenue and margin losses. The federal government reimburses most farmers about 60% of their insurance premiums, no matter how big or profitable they are. In addition, crop farmers often get disaster payments and a wide range of other supports that we’ll be discussing in future columns.
The basic understanding that large row crop farmers face an uncertain financial position over the next few years, and real concerns over potential deep losses, has raised the stakes and intensity in the farm bill debate. Congress has to hammer out the details over the size and scope of this “safety net” that is triggered on the basis of the market price of commodities. That’s the crux of the current stalemate.
Big Ag Republicans and corporate-friendly Democrats in Congress often support what is referred to as “raising reference prices,” the point at which subsidies kick in. This would normally be an easy sell on Capitol Hill, except it will cost a lot of money. When this farm bill was first being discussed, corporate Democrats and Republicans joined together, asking their leadership to find more money. Unfortunately for them, House Republicans were entering an era of championing budget cuts instead of the budget increases required to raise reference prices and expand the row crop safety net.
Rather than nix the idea of raising reference prices and expanding Title I subsidies, House Agriculture Committee Chairman Glenn “GT” Thompson (R-Penn.) and Senate Agriculture Committee Ranking Member John Boozman (R-Ark.) began looking for money in every farm bill program they’d like to eliminate. Their ideas have included relocating the nearly $20 billion in conservation funding from the Inflation Reduction Act, preventing a cost-of-living raise for the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) that USDA is supposed to provide every five years when they update the Thrifty Food Plan, and even cutting the Conservation Reserve Program, all of which are vitally important programs worth discussing in more detail in future columns.
To Democrats’ credit, they don’t seem to be budging on the idea of propping up the row crop industry by stealing promised funding for SNAP or conservation money, but a lot of them still remain in favor of the additional handouts.
Senate Agriculture Committee Chair Debbie Stabenow (D-Mich.), who is retiring this year, is using this moment to suggest a major shift by allocating subsidies away from Title I support to expanding crop insurance under Title XI. That would be a windfall for the handful of huge insurance companies that profit from crop insurance. Crop insurance disproportionately supports the largest farms, and as a result these farms would get huge premium subsidies with almost no restrictions. Neither Big Ag trade associations like the Farm Bureau nor commodity groups and their Republican allies like the idea, and they’re digging in their heels on raising reference prices.
All of this is to say that much can be done to reform the farm bill and reshape the agriculture industry, but this is an important impasse. The fight is over how to use taxpayer money to ensure that row crop farmers—particularly the big ones—stay relatively profitable while continuing to overproduce a handful of commodity grains. And, it’s about what programs would need to be sacrificed in order to expand the already massive row crop safety net.
Expanding the farm safety net by raising reference prices would have consequences. One of the biggest concerns is that it would lead to continued and expanded overproduction, causing soil erosion, water pollution and increased climate impacts. Overproduction of grains is also a backdoor subsidy to the meatpacker monopolies that purchase grain to feed their industrial cattle, hog and poultry factories.
Big Ag Republicans ignore these downsides to overproduction. In fact, they want to expand production even more. They see it as an almost religious mandate to farm every potential acre and produce as much as possible, fencerow-to-fencerow, damn the consequences. Just like they want to drill every ounce of oil in the country, they are obsessed with “feeding the world” even when there are literally mountains of grain all over row crop country. We forget that New Deal farm programs were created specifically to prevent overproduction and the boom-and-bust farm economy that comes with it.
It is possible to limit overproduction while also guaranteeing farmers decent prices and help when they need it. But that requires government intervention in the marketplace, a commitment to taking on the power of corporate agribusiness and implementing a system that makes the grain companies and meatpackers pay a fair price while providing a living wage to farmers. That seems pretty unlikely right now, given nearly all Republicans’ diehard support for the row crop industry and corporate-friendly Democrats’ unwillingness to take on Big Ag.
But let’s not lose sight of who is causing the lack of progress in the farm bill debate. The fault lies in Republicans’ crusade to subsidize overproduction of commodity crops through bad farm policy that they want to pay for by slashing conservation programs, rural economic development, clean energy programs and spending on popular nutrition benefits to poor and working-class people.
Bryce Oates writes The Cocklebur on Substack and is a Contributing Editor (Rural Community Organizing) at Barn Raiser. He writes about rural policy, people, places, and politics. His work includes narrative nonfiction, opinion pieces and Q&A interviews. Bryce studies how the federal budget affects rural counties, farm and food policy, public lands and conservation issues, racial and gender equity in rural areas, climate change, economic inequality, rural demographic data and rural politics. A former farmer, rural economic developer and community organizer, he lives and works in Oregon’s Willamette Valley.
Jake Davis is an entrepreneur, farmer, consultant, and policy advisor. His passion for revitalizing rural communities and safeguarding family farms developed early growing up on a diversified farm in Southwest Missouri. He launched Local Root Strategies in 2020 to help revitalize rural communities and build a better food system.