The 2012 Farm Bill – Passed by Senate Today, Moves to House

“Not Everyone Farms, But Everyone Eats.”

Today Congress passed the 2012 Farm Bill by a vote of 64 to 35.

But what exactly is the Farm Bill?

The United States Farm Bill turned into law in 1933 and signed by Franklin D. Roosevelt under the Agricultural Adjustment Act in order to provide subsidies and money to U.S. farmers in the midst of the Great Depression. Since then, the bill is reviewed by congress and renewed every five years. Currently, congress is negotiating the 2012 Farm Bill, as the current bill expires on September 30th. The 2008 Farm Bill consisted of 15 main areas:

  1. Commodity programs
  2. Conservation
  3. Trade
  4. Nutrition
  5. Credit
  6. Rural development 
  7. Research
  8. Forestry
  9. Energy
  10. Horticulture
  11. Livestock
  12. Crop insurance and disaster assistance
  13. Commodity futures
  14. Trade and tax provisions
  15. Miscellaneous

In 2008, the Farm Bill budget upped close to $300 billion. To put this immense figure into better perspective, this accounted for less than 1% of the total federal budget. The majority of the funds (about two-thirds) goes to public assistance programs, such as SNAP, with the remaining funds going towards agricultural subsidies, conservation, and crop insurance. Take a look at the figure below:

In 2008, the government spent less on commodities and more on domestic food assistance.  For example, the Supplemental Nutrition Assistance Program (also known as SNAP or food stamps), which aids food costs for low-income families, has had increasing enrollment as well as increased funding.  In fact, SNAP benefits went up from $34.6 billion in 2008 to a staggering $64.7 billion in 2010. This is mostly due to the current economic recession.  In fact, 2010 marked the first time that SNAP spending represented greater than 10% of all grocery spending (figure below).  The 2012 Farm Bill will continue to support the SNAP program and will emphasize ways to identify fraud and abuse of the system in order to find savings within SNAP. SNAP will no longer allow eligibility to lottery winners or college students being financially supported by families who are not of low-income status.

SNAP Trends

The 2012 Farm Bill is expected to cut spending by $23 billion over the next ten years. The bill was passed today by the Senate and is now moving to a Republican-led House of Representatives.

Along the lines of federal subsidies, the 2012 Farm Bill will reduce funds for direct price supports and subsidies to farmers.  Instead more emphasis is being placed on farmer’s risk management tools such as crop insurance in the case of a natural disaster.  This is supposed to be the staple of the farming security net.

One aspect of the bill that I am excited about are more grants supporting research and promotion of specialty crops, support of farmers’ markets,  and programs to allow more accessibility to healthy foods in low income areas.

Another amendment to the bill was to require state labeling of genetically engineered foods. This amendment was voted down and not included in the bill. Which i completely disagree with the amendment being voted down, I think companies should be required to label genetically engineered food.

With the recent economic downturn, it seems like more federal assistance is needed to support low-income families who have been hit hard by these trying financial times.  On the other hand, it doesn’t seem fair that farmer’s seem to be taking the brute of the repercussions with decreased subsidies, which in turn creates higher food prices for the rest of the country. While I admit I am still becoming more educated on the subject, these two conflicting issues seem to make the Farm Bill a type of “double-edged sword”. I don’t know, what do you think?


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