It seems Rep. Michael Conaway (R-TX), the chairman of the House Agriculture Committee, wants to make rich farmers even richer — at the cost of poor food stamp beneficiaries.
Every five years, a comprehensive omnibus bill, called the farm bill, is passed by Congress, dealing with agriculture and all other affairs of the U.S. Department of Agriculture. The first farm bills were created during the Great Depression to give financial aid to farmers who were struggling with low prices due to excessive crop supply. The bill allowed the government to buy excess grain from farmers and to provide them with payments for not growing crops on a percentage of land allocated by the secretary of agriculture.
The Agriculture Act of 2014, signed by President Obama, placed income caps on farm subsidies and ended direct payment subsidies that paid farmers, regardless of whether they actually grew any crops. The subsidy had cost $5 billion a year. However, Supplemental Nutrition Assistance Program is the largest portion of spending in the bill.
But this year, the Trump administration is not treating underserved people and farmers fairly. In fact, even as it makes it easier for big farmers to receive subsidies, the government is planning to slash half the benefits that food stamp recipients receive. That means 1 million fewer low-income Americans will receive food stamps.
Conaway gave his reasons for the unequal treatment: Apparently farm incomes have been down since they reached a record high in 2013.
“We’ve always had a safety net for farmers, and we’re trying to maintain it,” he said. “We don’t put any new money in the program.”
Currently, the federal government spends $17 billion on farm subsidies each year, including commodity programs that protect against a plunge in farm revenue or commodity prices. Right now, high-earning farmers with incomes above $900,000 ($1.8 million for a couple) are not entitled for the commodity subsidies, which are capped at $125,000 per farm household member.
However, Conaway’s new farm bill would exempt some farmers, classified as “pass-through entities,” from the income limit. The pass-through entities include joint ventures, partnerships and limited liability corporations, among other businesses, and are named so “because their profits pass through to their owners’ individual tax returns instead of being taxed at the corporate level,” according to the Huffington Post.
This means, anyone with a farm or farm partnership with an annual income above $900,000 can restructure itself as a pass-through entity, which would make them eligible for subsidies and hence render the cap on income useless.
The new bill would also enable pass-through entities to bypass the $125,000 payment limit, allowing them to receive unlimited subsidies from the government.
Conaway’s bill would also relax restriction on family farms. Under the 2014 Agriculture Act, only spouses, children and siblings of a farmer could also receive subsidies. But the new bill would add a farmer’s cousins, nieces and nephews to the list of people who can receive up to $125,000 annually, regardless of whether they grew crops on the farm.
Farm welfare critics say these agricultural subsidies would unfairly benefit the biggest farms. The House Agriculture Committee’s bill will only achieve in creating even more loopholes for rich farmers, which is probably what the Republicans want.
Conaway is hoping to bring the bill to the floor next week. Meanwhile, he has been encouraging party leaders to not allow amendments from anyone who will not vote for the final version of the bill.
“That type of loyalty pledge would make even President Trump blush,” said Rep. Jim McGovern (D-Mass). “This is deeply undemocratic and suggests Democrats shouldn’t even bother to participate in the amendment process.”
Banner/Thumbnail credit: REUTERS/Aaron P. Bernstein