Archive for the ‘farm subsidies’ Tag

Farm Bill Revolt   2 comments

Explain to me why we subsidize farms? Explain to me why our government gives farmers money not to grow food when our food prices have increased incredibly in just the last few years? The law of supply and demand states that if supply is good, price are low, but our government pays farmers not to grow food and then promises them a price support if the price of commodities still goes down.

Oh, my! It’s enough to make you dizzy.

America is broke, but politicians in Washington DC contrived another piece of Rube Goldberg legislation that is nothing more than a cynical merger of food-stamp and agricultural subsidies designed to garner enough votes to hide the lunacy of both programs.

The House defeated the latest farm subsidy bill last week, thanks to a band of fiscal conservatives, including House Budget Chair Paul Ryan. It was the usual product of shameless logrolling. Direct payments to farmers would have ended, but Congress then expanded a program of subsidized crop insurance in which farmers pay a fraction of the premiums. We pay the rest.

The farm bills now before Congress… attest, if nothing else, to the inertia of politics. There is no “public interest” (a phrase often meaningless in Washington) in having government subsidize farmers. Food would be produced without subsidies. Robert Samuelson, author and economics journalist

Samuelson, an economist at Iowa State University, argues that the crop insurance program is more like “a farm income support program”. Farmers’ premiums cover only 40% of the costs. You and I pay the rest. The CBO estimates the 10-year cost at $89 billion.

Meanwhile, farmers, on average, have incomes higher than most Americans. The majority of farms are big corporate operations run from distant city financial districts. Many others are “hobby farmers” – doctors, lawyers and investors who are basically absentee owners. I know a psychiatrist who owns a fairly large farm in Kansas. For years he’s spent about five months of his year there hanging out with his manager pretending to farm and the rest of the time he’s worked in the medical field. Now that he is retiring, he is going back to his roots as a farmer (Dad was a farmer and the nucleus of his farm is Dad’s old farmstead), but he doesn’t need subsidies and is in fact opposed to them and says he’s never taken any, though the government offers strenuously and often.

Last week, the Wall Street Journal editorial page ran a great rant entitled “The Farm Bill Revolt“. Commenting on the stunning defeat of nearly $1 trillion farm-subsidy-and-food-stamp bill, the Journal hoped that the vote indicated a decoupling of the long alliance between Democrats who support food stamps and the rural Republicans dependent on crop subsidies. It looked to me more like some liberal Democrats voted against a bill that gave too little money to food stamps and some conservative Republicans voted against a bill that spent too much period. It was a happy convergence of radically different goals, but the outcome was a good one.

The defeated bill continued ridiculous milk and sugar price supports, extended price support guarantees at no lower than 85% of current levels (a sweet deal since commodities prices are at record highs), and maintained subsidies for high-income agribusinesses and wealthy “farmers”.

Hundreds of millions of dollars were earmarked for such indispensables as… sheep and goat herder “marketing” subsidies, price controls on olive oil, and the promotion of “healthy plants.” Of course, true conservatives hated it.

Conservatives have supported smart reforms to farm policy for a while now, advocating to separated the food stamp program into a nutrition bill or sending food-stamp money back to the states to let them innovate and also considering a long overdue reform to commodity programs. This bill had none of that. It was a big giveaway, crafted by farm-state Republicans to continue to buy off their constituents. It too closely mirrored the bill passed by the Democratic Senate. The conservatives sank it, oddly with the help of liberal Democrats.

The good news, said the Journal, is that “The farm revolt suggests that these are the kinds of politically productive battles to fight.” Congressman Marlin Stutzman from rural Indiana agrees, saying his rural constituents “care more about out-of-control spending and the debt than they do about farm subsidies.”

Robert Samuelson believes that the survival of farm subsidies is “emblematic” of a much larger problem, that America’s priorities are completely out of whack, as evidenced by our failure to reform runaway entitlement spending and rationalize the tax code, both individual and corporate:

Government is biased toward the past. Old programs, tax breaks and regulatory practices develop strong constituencies and mindsets that frustrate change, even when earlier justifications for their existence have been overtaken by events. It’s no longer possible to argue that ag subsidies will prevent the loss of small family farms, because millions have already disappeared.

It is no longer possible to argue that subsidies are needed for food production, because one major agricultural sector — meat production — lacks subsidies and meat is still produced. 

So diehard GOP voters, conservatives who insist that the only option is the Republican Party – when will you admit that the Republican Party has not acted on your principles and this is the first sign in decades that they intend to stand up to the farm lobby against subsidy-driven overspending?

This time the conservative wing of the Republican Party had accidental Democratic help in doing the sensible thing, but next time …?

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