WEST LAFAYETTE, Ind. (WLFI) – For more than a decade, as part of the safety net for farmers, the federal government has given out direct payments to farmers in good years and in bad. It averages more than 5 billion dollars worth of taxpayer money every year. President Obama will sign a new farm bill into law Friday eliminating direct payments.
“Even farmers did not support getting payments when they might not need that,” said Purdue Ag Economist Chris Hurt.
While taking away direct payments, the new farm bill gives farmers even more support buying crop insurance. That may turn out to be a bad bargain for taxpayers. Crop insurance currently costs taxpayers an average of nine billion dollars a year, almost double the amount of direct payments.
Purdue Ag Economist Roman Keeney said direct payments may seem like a logical cut, but in some ways, it was a program that actually saved taxpayers money.
“If we always pass out the same amount of money, then there’s the benefit that we’ll always know what we’re spending as taxpayers in agriculture. It’s really transparent. We know how much money is flowing from the government into agriculture and we can see how people are managing and who is failing and who the direct payments aren’t helping,” said Keeney.
One final piece of the Farm Bill is an eight billion dollar cut to nutrition programs like SNAP, also known as food stamps. It amounts to a one percent of a total reduction in funding. Negotiations over the size of the cut was the primary reason for the Farm Bill to take so long to be passed.
“It’s pretty much the same size program as it was prior to this bill being passed. Congress was finally able to say that’s where we come out let’s basically keep it the same,” said Hurt.