Against the backdrop of the foolish pearl clutching that has greeted the CBO report that shows Obamacare will give people the freedom to choose to work less, I stumbled across a piece by Reihan Salam on Representatives Nikki Tsongas (D-MA) and Tom Petri’s (R-WI) push for a commission to improve co-coordination between federal and state anti-poverty programs. Petri is particularly interested in dealing with the disincentives to work that are built into many programs, sometimes in the aggregate.
For instance, consider the scenario of a single mother with two children making $17,000 a year living in Wisconsin in 2009 who claims all available deductions and participated in all eligible benefit programs. If this single mother were to work extra hours or receive a raise so that her earnings increase to $21,000, she would only see $540 of that $4,000 in new earnings—she would have lost $3,460 in benefits. That amounts to almost an 88 percent effective tax rate, leaving the hard-working parent and her children little to show for the extra effort. Even more shocking is that if this mother received a raise or worked more to raise her earnings another $1,000 to $22,000, she would actually have less in disposable income than she had when earning $21,000.
How can this be?
It all comes back to benefit phaseout schedules. For instance, SNAP benefits for a single mother in some states gradually diminish as income rise and eventually stop when earnings reach $23,000 annually, leading to over 100 percent in effective taxation at some point—meaning that you lose more than you bring in.
Reihan points to Oren Cass’ Flex Fund idea as one way of dealing with the issue. There is a lot for liberals and conservatives to like in Cass’ ideas. The biggest obstacle the idea faces is that it is a broad omnibus reform. Those are really, really hard to do. I’d like to suggest a small bore solution to a program that I’ve thought a lot about and have some experience with.
I’m going to lay the case for a tiered phase out of SNAP benefits as participants income rises. The three tiers would be the current basket of goods covered by SNAP, the WIC basket of goods or perhaps the WIC basket and finally fresh produce as covered in the new Food Insecurity Nutrition Incentive program. But first, let’s look at the case for whitelisting SNAP benefits in the first place.
I’ve long thought that the basket of goods covered by SNAP (Supplemental Nutrition Assistance Program, formerly known as food stamps) should whitelisted. That is, SNAP should pay for foods that provide sustenance. It should not pay for things like soda and cookies. Another reform would be to forgo the whitelist for recipients but require a mandatory basket of goods for participating retailers must carry and keep in inventory. Using the already existing WIC package would be a simple way to do this. Another popular idea would be to simply exclude sugary beverages.
Whitelisting SNAP would accomplish a number of important things:
- It would end a large indirect federal subsidy to junk food manufacturers
- It would increase the indirect federal subsidy to non-junk food producers
- It would improve the eating habits of a substantial number of Americans by increasing fruit and vegetable consumption that is too low and decreasing sugar consumption that far to high. There is a reasonable expectation that this would lower medical costs. Those are medical costs which are most likely being picked up by the taxpayer.
- It would serve as a strong public health message that diet matters and that junk food is not just empty calories
- It would nearly end the problem of food deserts over night. If corner stores needed to carrying a certain basket of goods to certify for SNAP, store in low income neighborhoods would start stocking fresh produce and whole grain bread and cereal over night. Problem solved. I’ve worked with corner stores to achieve WIC status. They respond to incentives and WIC participation changes their product mix for the better.
- It would insulate SNAP politically. A program that only pays for nutritious food is much harder to attack politically and would be less vulnerable to budget cuts.
The idea faces a few obstacles. First, anti-hunger groups won’t lobby for a change like this. They argue that it is demeaning to recipients that they couldn’t shop like everyone else.That it is stigmatizing to have pay for some items with their EBT card and for other by other means. They point out that SNAP participants eat about as well as everyone else. They argue that cheaper foods provide cheaper calories.
These arguments are easily dealt with.
There are lots of everyday necessities that you can’t pay for with your EBT card: aspirin, dish soap, tooth paste, sandwich bags. Shifting soda and potato chips into that category doesn’t make the check out any more demeaning than buying tuna and cold medicine in the same transaction. I’ve been on SNAP and I found room for a little ice cream here and there, but I would have traded that in a second for dish soap, tooth paste or double coupons for fresh produce. SNAP is by nature paternalistic. If we want a less paternalistic program, we would do a straight cash transfer. Given our cognitive biases against budgeting and the fact that a lot of SNAP spending is intended for kids, compartmentalizing an in kind transfer for food makes more sense. Now with the federal government on the hook for a lot more low income health care spending, it makes even more sense to exclude junk food. In fact, given what we’ve learned about behavioral psychology, done right, a SNAP whitelist could have a significant positive effect on participant’s food choices. That’s a topic for another day. Read More…
Yoni Freedman on PepsiCo and the Canadian Diabetes Association.
Wonderful interview with veteran and profitable organic farmer Tom Willey by Nathanael Johnson in Grist.
Modern Farmer: 5 Winners and 5 Losers in the Farm Bill
Here is an attempt to pin down what’s going on with the Farm Bill. The changes to SNAP are covered in this post.
For starters, it was a bi-partisan effort and is likely to pass. Jerry Hagstrom reports in Progressive Farmer:
WASHINGTON (DTN) — The chairmen of both the House and Senate Agriculture Committees predicted Tuesday the farm bill will pass both houses of Congress and President Barack Obama will sign it into law.
Meanwhile, endorsements for the bill, which was unveiled Monday evening, poured in from all sectors of agriculture, except the meat industry and some anti-hunger advocates.
“Even though it took us two-and-a-half to three years, we have a really amazing bill here,” House Agriculture Committee Chairman Frank Lucas, R-Okla., who chaired the conference committee, said Tuesday during a joint telephone news conference with Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich.
Considering the budget situation and “the political rancor we have had to deal with in Congress and across the country,” Lucas said, it is “not just a good farm bill, but almost a miracle.”
“This has been a joint effort, it has been bipartisan every step of the way,” Stabenow added, noting the bill not only saves money and reauthorizes existing programs, but provides disaster assistance for both livestock producers and fruit growers and increases agricultural research.
David Rogers spells out is a bit of detail on the programs that will be replacing direct payments.
The first program, known as Agriculture Risk Coverage, promises early — but temporary — assistance to growers facing a downward cycle of prices. Payments would be triggered once prices fall 14 percentage points below the prior five-year average. But the subsidy covers only a narrow 10-point band — from 86 percent to 76 percent of revenues — and will fade after several years if prices don’t improve.
Farmers whose ARC payments are based on countywide results will be paid on 85 percent of base acres. Those who choose a more individual version tailored to their own single farm — an approach popular in Western states like Montana — will be aided at a lower rate of 65 percent on base acres.
The second program, Price Loss Coverage, fits the more classic countercyclical model of fixed, government-set target prices — not a rolling five-year average. PLC payments would typically be triggered later in a market downturn but then promise the farmer a more permanent floor to cover production costs.
Payments here are on 85 percent of base acres and farmers who sign up for PLC will also have available to them a new lower-cost version of revenue insurance based on countywide losses. This so-called Supplemental Coverage Option is designed to parallel ARC in that it also will have a 14 percent deductible and is intended to cover only that band of losses down to where the farmer has more conventional buy-up crop insurance coverage.
A portion of the savings from the commodity title would be plowed back into new crop insurance programs, and more than ever this portion of the bill will become the backbone of the revised farm safety net.
Cotton will make a wholesale shift, getting out of most commodity programs and into a new stacked-income insurance plan tailored to its needs. SCO itself is counted in this title. And recognizing its importance, the bill also seeks to use crop insurance as a lever to promote sounder land use practices by farmers.
New conservation compliance provisions will be attached as a condition for getting the subsidized coverage. And a “sod saver” program in six Midwest states would greatly reduce the level of subsidies afforded farmers who choose to plow up native prairie lands.
- Cost of the Agricultural Act of 2014: $956.4 billion.
- According to the CBO, it’s expected to reduce federal spending by $16.6 billion over the next decade.
- Payment limitations across programs: $125,000 per farmer, doubled for married couples. Pushed by Thad Cochran, R-Miss. “Stabenow said she endorsed that approach because it will allow farmers to make the most use of the programs that work best for them, rather than worry about payment limits on specific programs.”
- The bill increases funding for commodity distribution programs that go to food banks.
- Merges 23 conservation programs into 13 for a projected savings of $6 billion.
- Cuts $8 billion from SNAP
- Allows for studying industrial hemp in states the permit it.
- Defines ‘farm raised fish’: “…any aquatic species that is propagated and reared in a controlled environment.”
- Makes provision to increase purchase of kosher and halal foods by the USDA’s emergency food assistance program that serves food banks and shelters.
What didn’t make it:
- A repeal of country-of-origin labeling for red meat
- An amendment by Rep. Steve King, R-Iowa, to forbid states from banning the sale of food products from other states due to objections over production methods, both Lucas and Stabenow said including either measure would have blown up the bill.
- Repealed: Red Meat Safety Research Center
Who’s happy. Who’s sad.
Chris Clayton notes:
(National Cattlemen’s Beef Association) President Scott George said Tuesday his group was willing to bring down the bill over COOL even though the bill would provide aid to livestock producers who have experienced disasters.
Disaster aid, George said, is a “Band-Aid” compared with trade retaliation. But he added that if the bill is defeated, NCBA will continue to work for disaster aid.
NCBA was joined in opposition by Heritage Action, an arm of the conservative Heritage Foundation, which came out Tuesday opposing the farm bill as well. Heritage criticized the inclusion of food programs in the legislation again, citing that 80% of the total spending in the bill is tied to nutrition programs.
Heritage also explains that while some bad subsidies and program were removed, lawmakers replaced them with even riskier taxpayer-funded programs. The inclusion of the Senate’s Agriculture Risk Coverage (ARC) program is of deep concern. An initial CBO score suggested the average cost of about $2.9 billion per year, but an analysis by the American Enterprise Institute found the program “could cost as much as $7 billion annually based on the 15-year historical average price.”
. . . Support even came from groups such as the Union of Concerned Scientists
“The bill includes reforms that could sow the seeds for a sustainable food and agriculture system,” said Daniel Brito, senior Washington representative for UCS’s Food & Environment Program. “Programs that incentivize increasing access to healthy foods, developing regional food systems, and promoting sustainable agricultural practices are included and funded at higher levels. But these programs should be the core of this legislation instead of on the periphery.
. . . The American Farm Bureau Federation called on lawmakers to quickly pass the bill in a statement by AFBF President Bob Stallman. “The American Farm Bureau Federation urges House and Senate members to pass H.R. 2642, the 2014 Farm Bill. …
“… We are particularly pleased with provisions to provide risk management to fruit and vegetable farmers and to support livestock farmers during disasters.”
National Farmers Union President Roger Johnson also urged lawmakers to quickly pass the legislation in a letter outlining NFU priorities in the final language.
“NFU is pleased with the conference report for a variety of reasons,” said Johnson. “The bill includes fixed reference prices to provide assistance to farmers only when truly necessary. It provides a strong crop insurance title and approximately $4 billion in livestock disaster assistance. The bill increases funding for the Farmers Market and Local Foods Promotion Program and related initiatives. We are also encouraged by the inclusion of robust mandatory funding levels for renewable energy programs. We’re also very happy that the bill preserves the ability of American family farmers and ranchers to distinguish their products in the marketplace through the existing Country-of-Origin Labeling (COOL) law.”
. . . National Association of Wheat Growers President Bing Von Bergen, a Montana farmer, said NAWG supports the conference committee bill “that strengthens crop insurance and allows growers the necessary safety net to keep a secure, affordable and healthy food supply. In addition, this bill provides funding for important programs in conservation, research and trade that help keep America’s wheat industry productive and competitive on a global scale.”
The National Cotton Council announced its support for the bill, praising lawmakers for providing cotton producers with transition Direct Payments for the next two years. While some criticized commodity payments and income restrictions as too loose, NCC Chairman Jimmy Dodson expressed concern about adjusted gross income language and the possibility that the Secretary of Agriculture could tighten rules on being actively engaged.
Mark Tercek, CEO of The Nature Conservancy and Martin Barbre, president of the National Corn Growers Association write in a joint editorial in The Hill:
The new farm bill has several important provisions to advance effective conservation, respecting the vital role that farmers, ranchers and forest owners play in conserving our nation’s soil, water and wildlife. For example, conservation groups and farm organizations came together to support linking conservation compliance with crop insurance to encourage farmers to preserve native grassland and other environmentally sensitive land.
This was done while cutting billions of dollars from the conservation and forestry titles of the bill overall. Even with those cuts, the bill increases budgets for large-impact investments, such as conservation easements and smart targeting through partnership programs.
Farmers, ranchers and other private landowners in America depend upon these farm bill programs to help them provide a safe and abundant food supply while at the same time protecting and restoring wetlands and grasslands, improving water quality, increasing flood control and providing wildlife habitat.
Bets on Farm Bill Victory: Lucas, Stabenow Predict Farm Bill Will Pass Congress, President
Jerry Hagstrom | Progressive Farmer | 28 January 2013
New farm bill readied for debate
David Rogers | Politico | 26 January 2014
More Commentary on the Farm Bill
Chris Clayton | Progressive Farmer | 28 January 2014
The Agricultural Act of 2014, aka the Farm Bill
Chris Clayton | Progressive Farmer | 27 January 2014
Hemp, farm-raised fish, food labels and food stamps: What’s in the farm bill?
Ed O’Keefe | The Fix | The Washington Post | 29 January 2014
Farm Bill gets it right on conservation
Mark R. Tercek and Martin Barbre | The Hill | 28 January 2014
Farm Bill Conferees Struggle with Dairy Compromise
Jerry Hagstrom | Progressive Farmer | 13 January 2014
Playing Chicken With the Farm Bill
Twilight Greenaway | Takeapart | 2 August 2014
FINAL VOTE RESULTS FOR ROLL CALL 31
HR 2642 | YEA-AND-NAY
Clerk of the House | 29 January 2014
An overview of what’s going on with the ag part of the bill can be found here.
The Washington Post’s Ed O’Keefe on cuts to SNAP:
Negotiators found a way to cut about $8 billion in funding for the program over the next decade.
Most of the savings will come by tweaking federal “heat and eat” benefits that House and Senate aides say have been exploited in recent years by several states and the District of Columbia to boost how much money some people receive from SNAP.
The changes will require the states and D.C. to pay more in “heat and eat” money, a move that will reduce, but not eliminate, SNAP payments by about $90 monthly for about 850,000 households.
The Farm Bill also cuts SNAP funding by prohibiting the Agriculture Department from spending money on television, radio and billboard ads to promote the program and on programs designed to recruit new beneficiaries. And in response to years of documented evidence of misuse and abuse of the program, USDA will need to ensure that illegal immigrants, lottery winners, college students and the dead cannot receive food stamps and that people cannot collect benefits in multiple states.
Lawmakers may tweak the “heat-and-eat” arrangement so that households must receive $20 in heating assistance before automatically qualifying for more food stamp benefits, according to media reports. Now, the threshold is as low as $1.
Advocates for the poor said that under the proposal, 175,000 households in Pennsylvania would lose an average of $65 in food stamp benefits each month.
New Jersey also utilizes the “heat-and-eat” arrangement.
Bill Clark, president of the hunger relief organization Philabundance, said the “heat and eat” setup makes it easier for low-income families to get the public benefits they need.
“It was just a more administratively efficient way of finding people who really needed the help, so it’s possible that this isn’t going to save anybody anything,” he said. “In fact, it may cost administratively more.”
Proponents said the change would eliminate a loophole that states take advantage of at the expense of taxpayers.
Robert Greenstein of The Center of Budget and Policy Priorities is fairly supportive, in a “If there are going to be cuts, this is how you do it” kind of way.
. . . it stands in sharp contrast to the nearly $40 billion in SNAP cuts in the House-passed bill of September, which contained an array of draconian provisions and would have thrown 3.8 million people off SNAP in 2014, according to the Congressional Budget Office (CBO). The conference agreement includes none of the draconian House provisions — and it removes virtually no low-income households from SNAP.
The SNAP cut that remains is a provision to tighten an element of the SNAP benefit calculation that some states have converted into what most people would view as a loophole. Specifically, some states are stretching the benefit formula in a way that enables them not only to simplify paperwork for many SNAP households, but also to boost SNAP benefits for some SNAP households by assuming those households pay several hundred dollars a month in utility costs that they do not actually incur. Congress did not intend for states to stretch the benefit rules this way, and longstanding SNAP supporters like myself find it difficult to defend. Moreover, a future Administration could close off this use of the rules administratively, without any congressional action.
Two-thirds of states do not use the current rules this way, and no SNAP beneficiaries in these states are expected to lose any benefits under this provision. Across the other one-third of states, CBO estimates that 88 to 89 percent of beneficiaries would remain untouched, while 11 to 12 percent would remain eligible for SNAP but face a benefit reduction because their state has used this practice to boost their benefits above what they would otherwise be.
Nationally, 4 percent of beneficiaries would face a benefit cut, CBO projects. Over the coming decade, total SNAP benefits would be 1.3 percent lower as a result. The 850,000 households that would lose benefits would, however, face a significant benefit reduction — costing them an average of $90 a month.
The final package also includes a number of other provisions designed to strengthen SNAP and to address features of the program that affect an infinitesimal number of households but can be used to stoke public hostility toward the program. For example, the agreement bars big lottery winners from receiving SNAP and clarifies that recipients may not deduct medical marijuana expenses to claim a larger SNAP benefit. The agreement also includes provisions designed to provide SNAP households with more access to healthy food outlets such as farmers’ markets, to ensure that retailers that participate in the program offer a healthy variety of foods for sale, and to tighten retailer compliance with SNAP rules. In addition, the proposed agreement would establish up to ten demonstration projects to test ways to provide more effective employment and training services for SNAP participants, which could provide useful information on how to better enable participants to secure and retain jobs.
Hemp, farm-raised fish, food labels and food stamps: What’s in the farm bill?
Ed O’Keefe | The Fix | The Washington Post | 29 January 2014
Commentary: Nutrition Title of Farm Bill Agreement Drops Draconian Cuts and Represents Reasonable Compromise
Robert Greenstein | The Center on Budget and Policy Priorities | 27 January 2014
Healthy incentives are farm bill bright spot
Oran Hesterman | Congress Blog | The Hill | 28 January 2014
Changing ‘heat and eat’ benefit threatens food aid in Pa., N.J.
Holly Otterbein | Newsworks | 13 January 2014
Randall Monroe | XKCD
ARE FOOD BANKS SELLING OUT TO CORPORATE AMERICA?
Steve Holt | Take Part | 23 August 2013
behind the stacked boxes and eager volunteers is what author Andy Fisher calls an unholy alliance between food banks and corporations, many of whom earn big tax credits and glowing PR for donating money and food to anti-hunger groups.
It gets worse, he says: The country’s largest food banks are governed by boards dominated by corporations, including Fortune 500 industrial food companies like Walmart, ConAgra, and major grocery chains. As many as a quarter of the board members at major food banks come from Fortune 500 or Global 500 companies, Fisher found.
AMERICAN FARMERS SAY THEY FEED THE WORLD, BUT DO THEY?
Dan Charles | NPR
It seemed that this dispute needed a referee. So I called , an economist at Cornell University who studies international agriculture and poverty.
“They’re both right,” he says, chuckling. “Sometimes the opposite of a truth isn’t a falsehood, but another truth, right?”
It’s true, he says, that bigger harvests in the U.S. tend to make food more affordable around the world, and “lower food prices are a good thing for poor people.”
FARMING SMARTER WITH COVER CROPS
Brian Scott | The Farmer’s Life
What excites me most about cover crops is keeping more of what we have and potentially using less inputs in the future. I feel that increasing organic matter alone will be a great improvement to our farm even without all the other benefits. As organic matter increases soils can handle water better and hold on to and provide more nutrients to a growing cash crop. Improved soil structure means our crops will grow deeper roots. Having an active root system in the ground twelve months of the year instead of six means the beneficial organisms in the soil will be more active which is really good.
Nitrogen is one of our most expensive and most necessary inputs. If cover crops can allow us to either use less nitrogen or at least do a better job of effectively using the nitrogen we apply that will be a huge bonus for corn. Boosting yields on one end and cutting costs on the other end is a pretty great combination. Cover crops aren’t free, but I think their benefits will far exceed the costs.
PETERSON REMAINS SKEPTICAL ABOUT FARM BILL’S CHANCES
Tom Cherveny | West Central Tribune
He told the group that many in the majority party in the House oppose not only the food stamp provision, officially the Supplemental Nutrition Assistance Program, but any type of Farm Bill itself.
Peterson said southern states used to elect representatives who were concerned about agriculture. However, he said, the last two elections saw winners emerge from the South who could not “care less about farmers.”
“They want to get rid of farm programs, cut the budget,” Peterson said. “It’s a different world.”
A very different world could be coming if a Farm Bill is not approved.
NEW MEXICO’S DROUGHT THREATENS A WAY OF LIFE
Cindy Carcamo | The Los Angeles Times
Her husband, John, the mayordomo of the acequia at their farm, was also reluctant at first. By May, friends with the acequia association persuaded the Boneys to set aside a test plot — 100 feet long and 70 feet wide — and install drip irrigation to grow lettuce, chard and other vegetables. It’s the first time such irrigation is being considered for wide use in the county.
“If it doesn’t work, I can always go back to the old ways,” said Boney, 54.
Antonio Medina, who encouraged Boney to try drip irrigation, was once uncomfortable with straying from the old ways. But the 75-year-old Medina has never seen a drought like this.
Mishka Henner | Mishkahenner.com
SOLUTIONS FOR MICRONUTRIENT DEFICIENCY
Anastasia Bodnar | Biofortified | 7 September 2013
The recent destruction of Golden Rice trials in the Philippines has me thinking again about how crop genetics, including biotechnology, can help in reducing malnutrition. Greenpeace and others would have us believe that home gardening and supplements are the solution, but unfortunately it’s just not that simple. On the other side, I’ve seen quite a few short posts dismissing the potential of gardens and supplements but haven’t seen anyone go into the details. Let’s examine them thoroughly.
Let’s start with some good news: we have made great strides in reducing hunger. Millennium Development Goal number 1c, set by the United Nations in 2000, was to “halve, between 1990 and 2015, the proportion of people who suffer from hunger”. We are on target to meet that goal, but despite these efforts, “about 870 million people are estimated to be undernourished”.
“We know that a lot of things contribute to poor nutrition and obesity but access is a key issue,” says Dr. Giridhar Mallya of the Philadelphia Department of Public Health. “People don’t have the ability to get healthy foods in their community at an affordable price. That makes it that much harder for them to be healthy overall.” See how The Food Trust and its partners are improving food access and health in Philadelphia and around the country.