The first Farm Bill in 1933 enacted temporary income supports for farmers. It was a liberal, New Deal response to a post-World War I collapse in crop prices that coincided with a terrifying drought. Temporary became the new normal and normal became a trap. Government programs became another fact of farm life along with weather, disease and rainfall.
The entrapment worsened in 1980, when President Jimmy Carter unilaterally cut off wheat exports to punish the Soviet Union after it invaded Afghanistan. It took 15 years for grain markets to recover from government interference. Crop insurance programs originally intended to cover just natural disasters were expanded, with the government subsidizing premiums and mandating coverages.
Until the 1980s, not many farmers could afford the coverage. Today, taxpayers cover 60 percent of the cost of premiums. Government stands behind the insurance companies to mitigate their exposure in exchange for a requirement that anyone who applies has to be covered, with no exclusions.
There’s more: Government subsidies remove risk from the insurance equation for both insurance companies and individuals. Government and insurance companies can encourage good planting decisions but can’t require them. Insurance companies can’t drop individuals who have a track record of poor planting decisions and can’t compete on the basis of coverage offered, because government mandates the coverage. Farmers face penalties for refusing to participate.
In a similar way, health insurance is embedded into Obamacare. The Affordable Care Act has little to do with care and much to do with insurance policy.
Congress after Congress has attempted to reform the Farm Bill to reduce dependency, with limited success. The effort is bipartisan, with liberal think tanks like the Brookings Institution as well as conservative groups like the Club for Growth pushing for change.
But lobbying always coalesces around defending the status quo as individuals and institutions grow comfortable with the system.
Obamacare faces the same challenges in attempting reforms without repeal, made worse by the highly partisan atmosphere in which it was born.
Agriculture drives our state with a greater economic impact than Boeing and Microsoft combined. Maintaining a healthy agricultural sector is clearly in everyone’s best interest. The Future of Farming Report prepared by the Washington Department of Agriculture in 2008 identified five keys to a sustainable future for farming, and more government subsidies didn’t make the list. The primary issue identified by farmers was the elimination of regulatory barriers that threaten agriculture’s competitiveness, innovation and retention of the next generation workforce.
Obamacare poses similar threats in health care. At a time when we need more doctors for an aging population, we are driving them out of the workforce with new regulations. Substantive competition in health insurance is nearly eliminated by government mandates. With risk taken out of the insurance relationship by government underwriting, risk-less decisions and lack of competition will drive up subsidy costs. Individuals and institutions will figure out how to work the system. Those benefiting from the status quo will lobby hard for their own interests and resist innovation.
There are good reasons to provide a safety net for agriculture. Food is a necessity for individuals, agriculture is the mainstay of our state economy, and food security is essential for a nation to thrive. There are equally good reasons to provide a safety net for health care, not because health care is a right but because it is a necessity and we are a compassionate people.
We have over 80 years of experience with government subsidy and risk-less insurance schemes in agriculture. We know the unintended political consequences. Congress has bipartisan difficulty negotiating Farm Bill reforms for the less than 1 percent sliver of the federal budget allocated to farm subsidies.
The degree of difficulty is much higher in reforming the highly partisan Affordable Care Act and the 26 percent of the federal budget dedicated to health care. Real health care reform needs to start over.
Sue Lani Madsen can be reached at firstname.lastname@example.org or on Twitter: @SueLaniMadsen.
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