by The Daily Signal | 3.27.18
Daren Bakst studies and writes about agriculture subsidies, property rights, environmental policy, food labeling and related issues as The Heritage Foundation’s research fellow in agricultural policy. Read his research.
The House’s disaster aid bill, at $81 billion, is nearly double the Trump administration’s request of $44 billion. These costs are not offset by spending cuts elsewhere. So much for fiscal responsibility.
Contained within this bill is an expansion of already excessive handouts to the cotton industry. Using the cover of a disaster bill to funnel more money to cronies at the expense of taxpayers is precisely the type of action that leads Americans to have such a low opinion of Congress.
Besides that, the provision has absolutely nothing to do with disasters.
Specifically, it would make cotton eligible for another farm handout scheme known as the Price Loss Coverage program, which primarily helps large farm businesses meet their financial bottom lines.
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This subsidy expansion has been a desire of the cotton lobbyists and the “swamp” for over a year. To date, such a major policy change hasn’t become law.
Cotton growers already participate in the federal crop insurance program. This is a program in which taxpayers pay for 62 percent of the premium costs for participating farmers.
That apparently isn’t enough. So Congress created a special crop insurance program just for cotton called the Stacked Income Protection Plan, known as STAX. Taxpayers pay a whopping 80 percent of the premiums for the new cotton-only program, which covers minor losses for cotton growers.
That agreement was struck in order to resolve a longstanding trade dispute with Brazil in response to past U.S. domestic cotton subsidies, which violated World Trade Organization rules. The $300 million payment is in addition to about $500 million the U.S. paid to Brazil from 2010 to 2013.
Lawmakers intentionally excluded cotton from the Price Loss Coverage program in the last farm bill because of trade-related concerns. By adding cotton to the program, Congress very well could be jeopardizing the settlement agreement and risk trade retaliation.
If the past is any indication, Congress would expect the U.S. to pay off Brazil with even more taxpayer dollars to maintain indefensible cotton subsidies.
A recent report from the Congressional Research Service provides even more compelling information on just how generous Congress (using taxpayer money) is to the cotton industry. From 2014-2016, cotton:
This proposed expansion of cotton subsidies is fiscal malpractice and completely thumbs its nose at American taxpayers.
Such a major, substantive change to farm policy is also completely inappropriate for a disaster aid bill, especially given the fact that lawmakers will debate the next farm bill in this upcoming year.
The House should immediately remove this additional cotton handout from the disaster aid bill. It is shocking that lawmakers included it in the disaster aid bill in the first place.
Written by The Daily Signal
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