US: The 2018 Farm Bill

7 February 2018 Benjamin Walsh, Research Analyst, Global Food and Water Crises Research Programme

Background

The Farm Bill is the primary tool the US Government uses to write agricultural policy. The Bill has 12 titles that cover topics such as trade, credit, nutrition, commodities and conservation. Every four to five years the Bill is re-enacted and, this time around, the Trump administration will address all 12 titles with deregulation and business opportunity in mind. The government will look to implement measures that will encourage the private sector to invest more in agriculture to allow the federal government to reduce public spending.

Comment

In terms of policy, Trump’s first year in office was one of the most conservative since Calvin Coolidge. Many within the administration will be determined to keep this accolade alive in 2018 and deliver the American people the change they sought with the election of Trump.

Comparing Trump to Coolidge may seem disingenuous to some, however, a close look at the latter’s commitment to a conservative, yet divisive, stance on agricultural policy may contribute a better understanding of Trump’s approach to this year’s Farm Bill. The implication of comparing Trump to Coolidge is that it is possible to understand Trump’s economic policy by extracting Coolidgean lessons and ideas; the scope of deregulatory policy under Coolidge is a possible indicator of future domestic policy under Trump. Trump is not Coolidge but the comparison, and Trump’s past year, is a good indicator of the path his administration wants to go down.

During the depression of 1920-21, Coolidge faced a hard hit rural America demanding huge government intervention. Farmers turned to McNary-Haugenism, a plan that would allow farmers to sell surplus produce to the government which would then market and sell it abroad. The aim was to dump excess goods in foreign markets and “equalise” agricultural production in America while providing a minimum price for local producers. Coolidge, however, vetoed the legislation on every occasion because buying produce using government money would encourage farmers to produce more crops, which would require more government money to buy resulting in an endless cycle of crippling government spending.

Despite McNary-Haugenism being quite popular, Coolidge believed it ran contrary to his administration’s America First mantra and instead saw private initiative as the way forward. Agricultural prosperity was predicated on the idea that not only farmers but politicians needed to take a risk and refrain from interfering.

Coolidge is remembered because of how he oversaw America’s transition from the 19th to the 20th century. He retained a consistent conservative approach to economic policy even when the culture and political progressivism was pulling him in other ways.

Trump, though never part of the conservative movement, has been likened to past Republican leaders, like Coolidge, because of his administration’s desire to be conservatively consistent, America first and chiefly business orientated when previous administrations have failed to be. Trump’s commitment to massive deregulation and government rollback has been a staple of the presidency so far and is likely to influence his Farm Bill.

The Farm Bill, therefore, can expect to fulfil one of the administration’s missions to reduce wasteful subsidies and target areas of investment that will be best suited for it. Even though Trump said he supported a Farm Bill that includes crop insurance, he has also directed the Department of the Interior to make it easier for the private sector to invest in telecommunications facilities in rural America. Secretary Sonny Purdue at the Department of Agriculture and Scott Pruitt at the Environmental Protection Agency have been relatively hawkish on policy, their goals being to reduce taxes and regulations. Trump’s aims to minimise the government’s involvement in other people’s businesses could materialise as there is every potentiality he targets what The Hill calls ‘the three most critical policies in need of reform’ surrounding agriculture.

The 2018 Farm Bill & Legislative Principles argues for the opening of new markets so US farmers can raise incomes via the market rather than the government, and for the “monitoring” of foreign markets that espouse trading practices that impede on US interests. Despite the confusion surrounding the North American Free Trade Agreement (NAFTA), it is unlikely that the US will walk away from the agreement. It currently supports around 14 million US jobs, and though NAFTA may find itself out of the Farm Bill, it will be closely linked to it and could become a central policy focus for the administration this year.

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