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House Poised to Approve Bill Continuing Giant Giveaways to Big Agribusiness

For Immediate Release

Five Ways the Farm Bill Brings Home the Bacon for Big Ag

Statement of Dan Smith, U.S. PIRG Tax and Budget Advocate, on the Farm Bill being voted on by the U.S. House:

“U.S. PIRG urges the House to vote NO on the Farm Bill scheduled to be voted on today. Like the Senate’s Farm Bill, this legislation would keep the gravy train flowing for big agribusiness, locking in their unjustified corporate handouts for the next five years. Members of the House should stand firm and reject this bill once again. With Congress focused on how to fix the budget, our elected leaders shouldn’t squander the opportunity to cut off these outrageous giveaways to Big Ag once and for all.

“This bill will continue the current practice of disproportionately subsidizing the largest agribusinesses, which are already profitable and don’t need taxpayer handouts. While the Big Ag lobby claims to stand up for small farmers, 74 percent of these subsidies went to just 4 percent of agribusinesses, with more than 60 percent of farms not even getting a dime.

“A vote for this bill is pure and simple a vote for special interest handouts at the expense of average taxpayers.”

Five Ways the Farm Bill Brings Home the Bacon for Big Ag

Big Ag’s bait and switch

The House Farm bill eliminates the “Direct Payments” program – long the poster child for wasteful agricultural subsidies, known for handing out checks to rich landowners who don’t even farm. But in a political sleight of hand, the bill plows more than half the savings from cutting Direct Payments into a new subsidy program that will continue to give handouts to large agribusinesses that don’t need our tax dollars.

The new Price Loss Coverage program guarantees agribusinesses 85 percent of the revenue they received in previous years, locking in the record high prices of recent years. A study commissioned by the Environmental Working Group found that if prices fell, the new program could cost taxpayers $20 billion more over the next decade than the discredited “Direct Payments” program.

Big profits mean big subsidies

Since 1995, just 4 percent of agribusinesses have made off with three quarters of the subsidies. Yet the House bill does next to nothing to reduce or eliminate subsidies for agribusinesses with high incomes. For millionaire farmers, the checks will keep on coming.

No caps mean million dollar checks

Both the House and Senate bills fail to put any cap on how big a check an agribusiness can receive to help pay its insurance bill. Currently, taxpayers pay over 60 percent of the premiums for insurance that compensates agribusinesses for poor yields, price declines, or both. On top of that, taxpayers pay 15 private insurance companies $1.3 billion to run the program.

Because the program has no caps, 26 agribusinesses have received more than $1 million in a single year, while 80 percent get $5,000 on average, according to a study from the Environmental Working Group.

Instead of reining in this program and capping how much agribusinesses can receive, both the House and Senate bills actually expand it.

Paying to market Big Macs and underwear abroad

The House and Senate bills make no changes to the $200 million per year Market Access Program, which subsidizes ad campaigns for giant agricultural companies and their trade associations. Companies receiving funding have ranged from McDonald’s to Fruit of the Loom. Taxpayer money has even been used to pay for a reality TV show in India to promote cotton. Companies are perfectly capable of buying their own airtime - they don’t need taxpayer dollars to subsidize their ads.

Subsidizing junk food

At a time when America faces an obesity epidemic, billions in subsidies underwrite the production of junk food additives. Between 1995 and 2011, U.S. PIRG research found that $18.2 billion subsidized four common junk food additives, including high fructose corn syrup. That’s enough to buy every kid under 18 eight 2-liter bottles of soda every year. By contrast, the subsidies for apples – the only fruit or vegetable that gets significant subsidies – would pay for less than half of an apple for each taxpayer.

Neither the House nor Senate Farm Bill makes meaningful reforms to correct this imbalance in our food policy.

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U.S. PIRG, the federation of state Public Interest Research Groups, is a consumer group that stands up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society.

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