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The federal government does lots of things that free market economists don't like, but it does at least one thing that they really despise: subsidies for farmers. These subsidies were up for renewal last year and the battle over them ended on New Year's Eve in a stalemate. As NPR's Dan Charles reports, Congress extended them but for just nine months.
DAN CHARLES, BYLINE: It's amazing how many different kinds of people have been trying to abolish or make big changes in the federal government's support for farmers. There are economists, of course, like Barry Goodwin of North Carolina State University, who say taking money from taxpayers to make life more secure for farmers is wasteful and inefficient.
BARRY GOODWIN: There's seemingly an intent to remove as much risk out of agricultural production as is possible with subsidies and subsidized insurance and revenue insurance. And you know, we typically don't see anything like that for other sectors of the economy, at least not to that degree.
CHARLES: And there are environmentalists, like Scott Faber from the Environmental Working Group.
SCOTT FABER: Subsidies encourage farmers to plow up wetlands and grasslands that they wouldn't plant if they were simply responding to the market.
CHARLES: Because most subsidies go to big farms growing corn, soybeans, cotton and rice, other critics say the government programs help the wrong kind of agriculture. They say if there are subsidies, they should go to small farms, organic farms, fruit and vegetable farms. And global anti-hunger advocates argue that aid to American farmers makes it harder for farmers in poor countries to compete in the global marketplace.
So every five years for the past 20 years or so, when farm subsidies come up for renewal in a law called the Farm Bill, all of these groups have come together in a chorus of criticism.
FABER: Why are we giving 15 or more billion dollars a year to the largest farmers to plow up big parts of our natural heritage, to drive their smaller neighbors out of business, to make it harder for poor countries to feed themselves?
CHARLES: The critics have had some successes. Farm payments went way up in the late 1990s, but they've been falling ever since. And last year, when the Farm Bill came up for renewal again, the anti-subsidy alliance saw a big opportunity. Farmers hardly needed help, especially when the government was cutting spending for other things. Apart from dairy and meat producers, who were hit hard by last summer's drought, farmers have been doing very well in recent years, better than most Americans.
So the negotiating and dealing started. The reformers got Congress to kill one big subsidy program, so-called direct payments. That program amounts to more than $4 billion a year. But farm groups argued farming still is a risky business, and the nation depends on a stable supply of food. They persuaded Congress to increase subsidies for another kind of safety net: crop insurance programs.
And then in the frantic rush to resolve the government's fiscal crisis, all of that just went out the window. House and Senate leaders simply extended the farm subsidies that have been in place for the past five years. They'll continue for another nine months, until September.
Democratic Senator Debbie Stabenow, who chairs the Senate Agriculture Committee, went to the floor on New Year's Eve to vent her outrage.
SENATOR DEBBIE STABENOW: Here's what happens under this extension. The subsidies we agreed to end continue. It's amazing, you know, how it happens that the folks that want the government subsidies find a way to try to keep them at all costs.
CHARLES: Now, some of the reformers agreed it was a disaster. The National Sustainable Agriculture Coalition, which represents small organic farmers, was angry because the coalition thought Congress was about to fund a bunch of small, new programs to support organic farming and local food production. But Scott Faber from the Environmental Working Group saw it as a partial victory. We didn't get what we wanted, he admits, but big farm lobbyists didn't manage to lock in their subsidies for another five years either. He's looking forward to renewing the battle in the new Congress.
Dan Charles, NPR News. Transcript provided by NPR, Copyright NPR.