Dan Morgan on the Farm Bill

Keith Good at Farmpolicy picks up a Dan Morgan piece on the current status of the farm bill. I was particularly struck by these paragraphs on the budgetary games and impact of high prices:

One irony of the congressional budget system is that the current record high commodity prices serve to protect the existing web of price supports and price guarantees. Even if Congress slashes those rainy day subsidies, CBO won’t credit savings, since CBO sees prices staying well above the existing subsidy floor most of the time. This leaves Congress with little budgetary incentive to make reforms.

(CBO projects that of the $66 billion in commodity costs between fiscal 2008 and 2017, only about $16 billion will go to traditional price supports and guarantees related to what farmers grow. The other $50 billion is accounted for by income support, known as direct payments, that goes to farmers automatically, regardless of prices.)

CBO’s new projections see federal crop insurance subsidies rising sharply, by as much as $14 billion over 10 years. (As farm prices rise, so do insurance premiums that are subsidized by USDA.) Congress could cut the subsidies and capture funds with which to pay for other priorities. But crop insurance subsidies have already been cut in the House and Senate-passed farm bills, and it isn’t clear how much more pain Congress is willing to inflict on the industry.