Politicians thought they were cutting Farm Bill costs by $23 billion, but it turns out that there will be no savings and may, in fact, be increased costs.
The Farm and Agriculture Policy Research Institute says the reason is relatively high price supports.
When the politicians were creating the Farm Bill, the United States Department of Agriculture was forecasting that crop prices would remain relatively high for the next five years.
Now, less than two months later, the price forecasts are trending down and it appears likely that the government will be on the hook to for $34.2 billion in price supports over the next 10 years.
The $23 billion in “savings” was achieved by cutting out the direct payments program that paid farmers money on an acreage basis no matter what they grew on that land.
The Congressional Budget Office forecasted that the Price Loss Coverage program would end up costing taxpayers $13.1 billion over the next 10 years.
“But as we’ve previously noted, the latest projections of crop prices by the U.S. Department of Agriculture (USDA) indicate that the prices of corn, soybeans, wheat, and other crops aren’t going to continue to climb toward still higher records in the coming years,” say the researchers.
“USDA now predicts many will dip below the freshly minted price floors – and in some instances stay below them.”