Frank Lucas Talks Farm Policy

OCPA’s Brian Bush recently sat down in the OCPA library with Oklahoma Congressman Frank Lucas to talk about the farm bill, crop insurance, and more.

BUSH: Congressman Lucas, thanks for making the time to return to OCPA today.

LUCAS: Thanks for having me, Brian. It’s good to be back. This institution is continuing to make valuable contributions to Oklahoma’s public life. I always enjoy reading Perspective each month.

BUSH: As chairman of the House Agriculture Committee, you are most known for your work on the farm bill. Let’s start by discussing what exactly the “farm bill” is.

LUCAS: Put simply, the “farm bill” is the legislative instrument that regularly sets the policy of the United States towards the hard-working families that produce the food we eat and drink and the fiber we wear.

BUSH: As you know, we at OCPA value a free-market approach, so we generally prefer less government interference in the marketplace whenever possible. When did the federal government become involved in production agriculture, and why?

LUCAS: The “farm bills” Congress considers from time to time today are a legacy that dates back to George Washington’s first proposals in the late 1700s to form a “national board of agriculture.” By the 1820s Congress and most of the state legislatures had standing agriculture committees overseeing work being done mostly by the Patent Office at that time related to farming and ranching in this country. President Lincoln created the U.S. Department of Agriculture (USDA) in 1862, and between that time and the 1930s several different pieces of agriculture legislation—“farm bills” before we called them that—passed Congress and were signed into law. These measures dealt with everything from agricultural research, meat inspection, and extension agents for educating producers to agriculture loans, farmer cooperatives, and commodity market regulations.

Of course, the Great Depression and the resulting 1930s “farm bills” under FDR saw radical centralization and command regimes put into place to try to stabilize production agriculture in this country during some pretty traumatic times. After that most “farm bills” built on the New Deal-era programs of quotas, allotments, etc. Once Republicans took control of Congress in 1994 for the first time since the Truman Era, we started moving federal agriculture programming away from central planning and towards a market-oriented, entrepreneurial situation where farmers and ranchers have a “safety net” that keeps them producing food and fiber for all of us to consume during bad times, but that during good times doesn’t expose the taxpayers.

It’s a tricky balance, but one we’re starting to see success in achieving. You’ll note that while most of the agriculture sector in this country is experiencing several years of prolonged drought, the taxpayers aren’t being asked for ad hoc, costly bailouts. The safety net we’ve crafted over the course of the last couple of farm bills is doing what it should do—helping us survive the bad times so that we can farm and ranch again during good times. And since we all eat, we all benefit from that.

I think your last question was, “Why has the federal government always had an abiding interest in production agriculture?” Recall that the Preamble to the Constitution points out that one of the reasons the Union was formed was to “provide for the common defense.” A critical part of that responsibility lies in ensuring that we are able to produce our own supply of food and fiber. If we can’t do that, we’re not secure—far from it! We can go without certain products and luxuries during times of war and hardship, but we have to have a certain number of calories each and every day. The Founders knew it, and today we need to remember it.

BUSH: You’re the first Oklahoman in history to chair the House Agriculture Committee, and our state is often cited as one of the most conservative states in the union. Were you able to bring those conservative principles to bear on the 2014 farm bill process?

LUCAS: Oh, yes. Some of your readers will recall that the 2014 farm bill should have been finished in 2012, when the 2008 law expired. In July of 2012 I was able to lead the Committee to pass, on a large bipartisan vote, a “farm bill” that would save taxpayers $35 billion in mandatory—a very important word, as mandatory programming is what is growing our deficit so dramatically—money. That bill would have repealed the last of what people traditionally view as “farm subsidies,” a program called Direct Payments, along with more than 100 other government programs. It also would have reformed food stamps to the tune of $16 billion—keep in mind that we haven’t been able to touch food stamps since Bill Clinton was in the White House! Unfortunately that bill was never allowed to come to a vote on the House floor.

In May of 2013 my Committee passed—again, by a large, bipartisan majority—a “farm bill” that would save taxpayers almost $40 billion in mandatory money by repealing Direct Payments and more than 100 other programs, and by reforming food stamps to the tune of $20 billion. Unfortunately, for varied reasons, this bill didn’t receive enough support to pass the House. We actually ended up having to pass the Nutrition Title in a separate piece of legislation in order to get to a conference with the Senate. It’s really a shame—had the House passed this version of the “farm bill,” conservatives like myself would have been in a much stronger negotiating position vis-á-vis the Senate Agriculture conferees.

Still, we were able to achieve significant conservative victories in the 2014 “farm bill” that was signed into law not too long ago. Direct Payments are gone; no longer will payments go out to people who do not produce food or fiber. Almost 100 different government programs were repealed or consolidated, helping make the total savings to the taxpayers in the new farm law over $23 billion. And food stamps were reformed to the tune of $9 billion; we also ended food stamp advertising and recruiting both at home and abroad, and empowered states to begin new work programs requiring able-bodied adults to put some sweat equity into receiving assistance.

BUSH: There seems to be some dissatisfaction with what ultimately came to pass as the new farm bill. Even some of us here at OCPA wonder if we might have missed a great opportunity to enact even more positive change. You have been in Congress long enough to know you can’t please everyone, but why are some groups who are generally conservative or at least free-market-oriented unhappy right now?

LUCAS: It has certainly been an interesting process. I personally began work on this farm bill more than four years ago, and the committee itself worked in earnest for two and a half years. We began that process with plans to make significant improvements, and I am proud that many of them made it into the final product. However, the bill that was eventually signed into law did not contain all of those ideas. That is partly due to the learning curve many of the new members of Congress had in getting up to speed on farm policy, since many of them were not in Congress when we last passed a farm bill. In addition, I was not willing to let this important legislation be one more victim of Congressional inaction. Our efforts to make sure the bill moved through the process meant that it was one of the only bills moving at the time. Our goal was to get as far as we could toward free-market reforms while also knowing that we had a hostile Senate and White House that would simply not allow us to go as far as we would like. In spite of those limitations, I am proud that the latest CBO numbers show they expect us to save even more than we originally thought—$24 billion more, in fact.

BUSH: Should we have waited to pass a new farm bill until the makeup of Congress was more conducive to enacting a higher level of those free-market reforms?

LUCAS: Absolutely not. Inaction on the part of Congress would lead only to food stamp abuses continuing unchecked. Inaction would mean that taxpayers would continue to pay for food stamp advertising and recruiting both in the United States and in foreign countries, and that even the deceased could continue to receive food stamps. And perhaps most worryingly, inaction would result in the outdated, New Deal-era permanent agriculture laws, which I have attempted to repeal, becoming law of the land once more and requiring USDA to reestablish a centralized, command-and-control regulatory regime that would throw markets into chaos and do immense harm to farmers and ranchers as well as taxpayers.

Voting for the new farm law was a vote in support of reducing the deficit, repealing levels of bureaucracy and overregulation, and reforming a major entitlement for the first time in a generation. I’m proud of the work we did at the Ag Committee. If every committee in Congress provided the level of deficit reduction that we did, our nation’s fiscal house would be drastically improved.

BUSH: Are there any areas where you agree with those so-called critics? Would you say there is still work to do on farm policy?

LUCAS: Yes. The food stamp reforms I proposed in 2012 and 2013 that the House failed to act upon should be reconsidered. We have to protect the taxpayers from state governments that are trying to mine the U.S. Treasury by taking advantage of loopholes in federal law. And we have to repeal the unworkable, 1940s-era permanent farm laws that could throw production agriculture into chaos and cost the taxpayers unthinkable amounts of money.

We should continue to empower America’s farmers and ranchers to do just that—farm and ranch. That means continuing to guard against attempts by agencies like the EPA to regulate production agriculture right out of existence. That means ensuring that the hugely successful private-public partnership that is crop insurance is able to continue to flourish and provide American farmers and ranchers with a market-oriented safety net.

BUSH: I’m glad you brought up crop insurance. Producers pay part of the premium, and the government pays part of the premium. Many outside the ag sector wonder why taxpayers pay for any part of the crop insurance premiums at all if they themselves aren’t farmers and ranchers. In their minds, yes, agriculture is risky, but so are other industries.

LUCAS: Firstly, I would remind you that we as taxpayers don’t just subsidize crop insurance. We also help pay for flood insurance and terrorism reinsurance, for example. Producers pay a significant amount of the premium out of their own pockets—over $4 billion a year. Crop insurance sees private enterprises engage with farmers and ranchers to use market innovation and demands to create new products for purchase and distribution. Losses are incurred by the crop insurance companies, while any actuarial gains are credited to the U.S. Treasury. So in the long term, crop insurance actually makes money for the taxpayer.

Risk is and always will be a factor in production agriculture. Each producer has to make decisions about how to best manage and mitigate that risk. The safety net that the “farm bill” has put into place is needed because agriculture is one of the few industries that produces something without which our society cannot possibly function. We can go without a lot, but we have to eat. Plain and simple.

We all have a vested interest in supporting production agriculture in this country. You may not know that roughly 250,000 farms and ranches produce 80 percent of the food supply in this country. That is a remarkably thin “green line” to which we all owe a great deal. Many Americans today are not cognizant of where their food comes from; even more are, thankfully, largely unfamiliar with the horrors of food shortages. The gap between those who produce our food and those who consume it continues to grow—this makes it all the more important that we have a safety net in place to see America’s family farmers through the bad times.
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