Approximately 100 Hill staffers attended a pair of briefings in early February that closely examined and debunked a number of farm policy criticisms leveled by the Heritage Foundation and other anti-farmer organizations.
The briefings, hosted by the House Agriculture Committee, featured policy experts, John Gilliland, an international trade consultant at Akin Gump Straus Hauer & Feld LLP, and Brandon Willis, the former head of the USDA’s Risk Management Agency.
Both experts shared findings from their individual rebuttals to the Heritage Foundation’s report, “Farms and Free Enterprise: A Blueprint for Agricultural Policy.” In that report, Heritage argued that America should unilaterally eliminate its farm safety net, including crop insurance.
“The critics’ conclusions are flawed; the prescriptions are even worse,” Gilliland told attendees.
From a trade perspective, Gilliland said that a repeal of U.S. farm policies would be disastrous, as it would not only devastate the U.S. agricultural economy, but it would fail to convince our trading partners to open their markets and eliminate their subsidies and predatory trading practices.
He pointed out that the United States is already an open market with low tariffs on imported agricultural products. The simple average U.S. bound tariff rate is only 4.8 percent.
Meanwhile, tariffs and subsidies in other countries are much higher. The Organization for Economic Co-operation and Development (OECD) estimates U.S. support in 2015 to be 60 percent lower than Europe and 87 percent lower than China.
“They are spending more just as we are scaling down,” Gilliland said.
Gilliland also noted that over the past two decades, Congress has enacted four farm bills, each taking steps toward more market-oriented policies.
“If you can find a way to distort a market you will see it in agriculture,” Gilliland said. “Our farmers are having to deal with that. The best way to deal with it is at the negotiating table.”
He noted the hypocrisy of critics who oppose multilateral approaches to bringing down trade barriers like Congressman Ted Yoho’s (R-FL) “zero-for-zero” sugar policy, which seeks elimination of global sugar subsidies.
“It must be puzzling for U.S. sugar farmers that proponents of free trade would deride a zero-for-zero proposal that targets the elimination of domestic subsidies and tariffs,” he said. “Is this not essentially what the Heritage Foundation proposes as the desirable outcome for all U.S. commodities?”
Willis was likewise puzzled by the attacks on America’s farmers and ranchers.
In his presentation, Willis zeroed in on Heritage’s cherry picked agriculture statistics — the same figures other anti-farm groups often highlight — which he says fail to capture the real challenges that American farmers and ranchers face.
For example, 60 percent of “farms” included in Heritage’s estimate of farm income are retirees and individuals whose primary occupation is not farming. As a result, Heritage is grossly overstating farm income and the stability of that income, while grossly understating farm risk and the need that real “dirt-under-the-fingernail” farmers have for farm policy.
The tight margins that farmers face year in and year out was also discussed.
According to a handout distributed during the briefing, “[Farmers] make a profit less than 30 percent of the time.” It also noted that nearly 50 percent of mid-sized farms, and nearly 40 percent of large family farms, were deemed “high risk” by the USDA because of low profit margins.
Managing the economic pressures and unpredictable weather that farmers face requires risk management tools like crop insurance. And when it comes to crop insurance, Heritage, and other farm critics, fail to tell the whole story in their attempts to unilaterally disarm America’s farmers and ranchers, Willis says.
He pointed out, for example, that critics were quick to complain about the cost of the 2012 drought, but ignored the fact that the disaster would have cost taxpayers $3 billion more than crop insurance under an old-style disaster program.
“For midsize farmers, crop insurance is the difference between staying in business and going out of business,” Willis concluded. To view Gilliland’s report, click here. For Willis’ report, click here.