Farm groups publish study directly challenging Heritage farm policy
September 27, 2017
Farm Policy Facts, an organization backed by a coalition of farm groups, published a study on Sept. 25 to refute The Heritage Foundation's blueprint for farm policy that calls for the elimination of many key farm programs.
The study, titled, "How Heritage Foundation's U.S. Farm Policy Proposals Would Put America Last," was written by Brandon Willis, the administrator of the Agriculture Department's Risk Management Agency in the Obama administration.
Willis wrote the Heritage Foundation study, entitled "Farms and Free Enterprise: A Blueprint for Agricultural Policy," published in September 2016, is flawed.
"The report selectively uses data in a manner that allows certain conclusions to be drawn about U.S. agriculture and farm policy. The Heritage report's recommendations are based on these conclusions," he said.
Willis maintained Heritage exaggerates the financial well-being of farmers, the risk of agriculture is different from other businesses, farm spending is small and getting smaller, crop insurance is a success and all Americans benefit from farm policy.
Willis focused on Heritage's analysis of farm income.
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"By combining the income of those who do not farm — but who have higher levels of income than the average American — with the income from households that do produce agricultural products on their land, the Heritage report misleads readers into believing that farm income is both more stable and higher than it actually is.
"Since this approach does not accurately illustrate actual farm income, neither can it illustrate profitability, reliance upon farming for income, nor need of U.S. farm policy. After all, what other sector's financial health is determined based on a measurement under which 70 percent of income is derived from other sectors?"
Willis also maintained, "when all costs are taken into account, a farmer has a profit less than 30 percent of the time." He adds that, "A safety net is often what stands between continuing to farm and bankruptcy."
Heritage also is critical of the crop insurance program, but Willis wrote, "crop insurance has not only proved better for farmers trying to manage risks, but is more cost effective than ad hoc crop loss disaster programs."
Willis said the 2012 drought would have cost taxpayers more than $17 billion under an old-style disaster program — $3 billion more than the cost of crop insurance in this worst of all years.
"The Heritage report's crop insurance proposal would increase deductibles and reduce available coverage, reducing participation and coverage levels and jeopardizing the nearly twofold increase in acreage insured that has been achieved since 2000," he wrote.
Willis also saw U.S. agricultural productivity and agricultural policy together as a success.
"U.S. agricultural output has almost tripled since 1948, 21 million American jobs are owed to agriculture, agriculture constitutes 5.5 percent of U.S. GDP, U.S. consumers are paying lower grocery bills than anywhere else in the world, the United States runs a trade surplus in agriculture, soil erosion has been cut in half since 1985, U.S. farm policy adds up to about one-quarter of 1 percent of the total federal budget," he wrote.
"It is difficult to conclude U.S. farm policy is anything other than a success," Willis maintained.
The study was sponsored by the American Association of Crop Insurers, American Sugar Alliance, Crop Insurance Professionals Association, Minnesota Corn Growers Association, National Cotton Council, Panhandle Peanut Growers Association, South Carolina Peach Council, Southwest Council of Agribusiness and Western Peanut Growers Association.
Willis presented an initial draft of the paper at the American Sugar Alliance meeting in August in San Diego. ❖