Introduction
The Farm Bill was signed into law on December 20, 2018, and the U.S. Department of Agriculture (USDA) indulged in the implementation process. The bill is signed once every five years and covers farming and food production issues. The overall aim of the bill is towards the creation of sustainable agriculture while setting the stage for food and farm systems. The current farm bill titled Agriculture Improvement Act of 2018 is geared towards addressing issues affecting farmers and the population. This paper explores Title IV, which focuses on the nutrition programs geared towards helping low-income Americans to afford food for their families. This includes the Supplemental Nutrition Assistance Program (SNAP) and other smaller programs geared towards helping struggling families cover their nutritional needs. This paper addresses the proposed efforts that will limit the types of food purchased through the SNAP program. In particular, the bill seeks to restrict the food products that can be bought to food staples and include white potatoes as part of the food products. It also aims to limit the acquisition of food products such as candies and soft drinks (United States Department of Agriculture, 2018). This paper seeks to explore the economic ramifications of implementing the legislation.
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The SNAP and Women, Infants, and Children (WIC) account for the largest portion of the US Farm Bill. The program distributes a substantial amount of food assistance to millions of people in the United States. 2018 set $867 billion spread for five years up to 2023 that will allow the government to cater to the nutritional needs of low-income Americans, including Children, Women, and infants. Farm Bill also covers other aspects of food production such as margin guarantees and risk coverage in commodity programs, conservation, trade, nutrition programs, credit, rural development, forestry, energy, horticulture, crop insurance, and other miscellaneous activities. However, the biggest portion of the budget goes to the SNAP and WIC programs (United States Department of Agriculture, 2018).
Impacts on Price and Quantity of Rice Sold In the U.S.
The United States consumes about 4.6 million metric tons of rice in the 2021/2022 fiscal year. On average, each American consumes about 26 pounds of rice annually. The proposed bill would reduce the amount spent on candies and soft drinks and thus allowing the population to acquire more staple food such as rise. However, since rice is not a popular food in the United States, the expected increase in demand is marginal, and thus the corresponding price increase will be small. An increase in demand will result in an increase in the price since the two are inversely related. Refer to the graphical relationship of the parameters in figure 1 attached in appendices (National Sustainable Agriculture Coalition, 2020).
Impacts on Price and Quantity Sugar Sold in the U.S.
The proposed legislation will reduce the demand for sugar as beneficiaries would not be allowed to acquire candies and soft drinks. Sugar is a major component in candies and soft drinks, and thus excluding the products from the list of products that can be acquired will lead to a reduction in demand. The exclusion of 9 million customers will lower the demand and the price of the products. On average, Americans consume 152 pounds of sugar annually. That translates to over 621,000 metric tons of sugar annually. Refer to figure 2 for the relationship between quantity demand and the price of a product.
Impacts on Price and Quantity of Wheat Exported out of the U.S.
The proposed legislation will leave more cash available to acquire staple food products such as wheat products. As a result, the demand for wheat products will rise and thus limit the quantities exported from the United States. Refer to figure 2 for the relationship between the increase in price and demand for the products. The relationship between the demand and price of the products is highlighted in figure 3 in the appendices. The changes in the factors will cause a shift in demand as farmers would be able to sell more in the local market rather than export the products.
Impacts on Price and Quantity of White Potatoes Sold in the U.S.
The inclusion of white potatoes in the program will increase the number of consumers taking the product as a source of calories. Therefore, there will be a shift in demand to accommodate the new consumers of the products that were not part of the consuming group. The United States has 30.6 pounds per capita consumption of white potatoes. The inclusion in SNAP and WIC programs will lead to an increase in the demand for the products. This will lead to a corresponding increase in the demand for the products locally and reduce the quantity exported out of the United States. Some scholars have demonstrated that growth in local demand leads to an increase in production and a subsequent rise in exports if the local demand is sustained. Therefore, the legislation will lead to a short-term decline in exports and a long-term increase in the future. Refer to figure 4 for the graphical representation of the price and quantity of wheat products.
Congressional District Impacts on Food
The new legislation will significantly impact Wisconsin as it is one of the areas that produce white potatoes. The inclusion of white potatoes in SNAP and WIC programs will lead to a corresponding increase in local demand and thus encourage more farmers to continue producing more potatoes. The increase in demand will lead to a rise in the price, and thus the farmers will enjoy better margins for their produces.
References
National Sustainable Agriculture Coalition. (2020, November 16). What is the farm bill? https://sustainableagriculture.net/our-work/campaigns/fbcampaign/what-is-the-farm-bill/
United States Department of Agriculture. (2018). Farm bill. USDA. https://www.usda.gov/farmbill
