May 14, 2002
By Stephen Moore"If government waste were an art form, the new farm bill would be the Mona Lisa."
—Syndicated Columnist Robert J. Samuelson, May 8, 2002
Congress Farms Taxpayers, Again
By Stephen Moore"If government waste were an art form, the new farm bill would be the Mona Lisa."
—Syndicated Columnist Robert J. Samuelson, May 8, 2002
Socialism, alas, is alive and well in the United States. If you doubt this, check out the farm subsidy bill that Congress passed last week.
The 2002 farm bill subsidies carry a $170-billion price tag over ten years. That’s twice the cost to taxpayers of any other farm subsidy bill that Congress has ever passed. Most of the loot will be carried off into the grain bins of some of America’s largest and richest agribusinesses.
A few years ago it seemed as though farm socialism was finally going to be abandoned in the United States in favor of free-market agriculture. In 1996 the congressional Republicans heroically passed a well-intentioned piece of legislation called the "Freedom to Farm Act." Subsidies to farmers were to be gradually phased out. In fact, next year was supposed to be the last for taxpayer aid to farmers. The U.S. government would intervene only in times of weather crisis, such as a drought. That "crisis" loophole was invoked every year, and in some years in the late 1990s, farmers got more aid under Freedom to Farm than they got during the old subsidy scheme.
Now, under the just-passed bill, the federal government will dole out more than $1 million in subsidies per full-time farmer who receives aid through the end of this decade. The attempt by the Senate to limit the aid package that any one farm could receive in subsidies to $275,000 a year—or about five times the average family income in America—was roundly defeated in the House, which approved a $550,000 limit. This was lowered to $360,000 by the conferees, but they also retained two provisions that allow farmers to sidestep the limits.
And so we are creating a Robin Hood in reverse farm policy. As the Heritage Foundation has discovered, this farm bill will cost the average American taxpaying family $4,300 in higher taxes. The injustice here is that the average income of the subsidized farmer is $10,000 higher than the average taxpayer whose take-home pay is being pick-pocketed by Uncle Sam to pay for this farm welfare system.
The farm state lobbyists insist that American growers cannot survive in the global marketplace without the tens of billions of aid they receive each year from Washington. But the reality of modern American agriculture contradicts that pessimistic premise. Of the 400 or so commercial agriculture commodities produced on American farms, only a few dozen—most prominently, cotton, sugar, rice, peanuts, and honey—are actually subsidized. The rest survive and even thrive without a dime of Uncle Sam’s help.
It’s insulting to our farmers to conclude, as Congress has, that they can’t make an honest profit without taxpayer handouts. American agriculture today produces three times more food on one-third as many acres, with one-third as much manpower as was the case in the 1930s. This is a productivity success story for the ages.
Indeed, farmers are victims of their own stunning success. Today only 2 out of every 100 American workers are employed in agriculture. The more productive farmers become, the fewer farmers we need to feed us. This innovation process is a good deal for the 98% of us who just consume food, rather than grow it.
Most farmers I talk to admit, but resent, that what we have today is a farm welfare system. Bill Clinton used to refer to it as "the farm safety net." Then why not a "telecom safety net" or a "semiconductor safety net" or a "beauty parlor safety net," or . . . I’d better stop before I start giving lawmakers any ideas.
A strong case can be made that the gigantic payoffs that the Congress makes to farmers do not benefit the vast majority of small and medium-sized family farms. Most of the money goes to the very farm conglomerates that small farmers are having such difficult competing with. Example: 83% of farm subsidies to Arizona cotton farmers go to those with sales of more than $500,000. The farm bill will have exactly the opposite effect that its supporters are promising. It will accelerate, rather than arrest, the decline of the old-fashioned family farmer as their agribusiness rivals slurp up the federal aid.
The definition of insanity is to try something over and over again even when it never produces the intended result. The U.S. government has spent more than $200 billion in farm aid since the late 1970s and yet, every year, more marginal farmers go out of business.
We are trying to achieve with our dysfunctional farm policies, what President Bush and many Midwestern industrial states are trying to do with the steel industry: artificially prop up companies that are non-competitive in the global market place, so that they don’t have to face the sometimes cruel fate of a free market. And just as steel tariffs, to the detriment of all the rest of us, only slow down the inevitable collapse of non-competitive U.S. steel producers, so it is with the farm sector.
We are not saving the most unproductive family farmers, we are only insuring that they die a slow, agonizing death. Five years from now the farmers whose heads we are propping up above water will be complaining with greater fervor, and then they will be demanding a $200-billion farm bill.
Congress has passed this $170-billion taxpayer rip-off called a farm bill, and as soon as President Bush affixes his promised signature we will have locked in another decade of agricultural socialism. Our policy of Freedom to Farm will be replaced with a new scheme that we might call Freedom to Farm Taxpayers.
Mr. Moore is Human Events' economic correspondent.
© Human Events, 2002
Farming for Subsidies
An agriculture bill plants outrages.
May 9, 2002
By Mike Lynch"I will vote for it, because we’ve been in drought," Montana Republican Conrad Burns proclaimed to his fellow senators on Tuesday. He added, "Will it help people with drought? No, it won’t."
Burns acknowledged other deficiencies in the federal farm bill that would pass the Senate the next day. In addition to doing nothing about the weather, the 10-year, $180 billion bill was over budget--way over budget. It also, he noted, included incentives for farmers to overproduce. Yet he would support it, and he was very frank about why.
"We are in a situation in Montana today were we need an infusion of money," said Burns. "That’s what’s driving my vote."
Burns’ candid if confused remarks reveal the bill’s true purpose: to harvest money from taxpayers and plant it in places where political flowers will bloom. These not only include rural states full of struggling family farmers and Archer Daniels Midland reps, but urban areas, where food stamps serve as scrip, and eco-friendly haunts, where pols hope green voters will reward them for transforming agriculture policy into environmental legislation.
For 70 years, the government has been shoveling money into rural America to prop up that most cherished of institutions, the family farm. Like most government programs, this has produced an unbroken record of failure. As columnist Robert J. Samuelson notes, the percentage of Americans tilling the soil has fallen from 21 percent of the population in 1929 to 2 percent today, even as the same amount of land is devoted to farm production. Like poverty programs that don’t reduce poverty and jobs programs that don’t produce jobs, this failure becomes a justification to dole out ever-larger sums of money.
By that standard, it’s succeeding. The bill--which President Bush is eager to sign, presumably to make good on his campaign promise to bring a "market-driven approach" to farm policy--promises $70 billion in increased subsidies.
The proposed law is as contradictory as Sen. Burns’ endorsement of it. By making farming more profitable, the subsidies increase land prices. A good thing, perhaps, for families that own their farms, but a bad thing for those trying to get a spread of their own. At the same time, however, they increase production, which depresses prices.
Bush’s farm policy, like his steel and lumber policies, makes a mockery of his claim to value free trade. He certainly doesn’t value it as much as the support of domestic industries in political swing states. Farm-state senators like the North Dakota Democrat Kent Conrad justify the bill’s blatant protectionism by pointing to the threat from Europe’s government-supported countryside. But the real target is farmers in poor countries who might be able to earn a decent living if prices for commodities such as cotton weren’t depressed by U.S. and European farm subsidies.
Why even call this a farm bill? It ought to be titled the Omnibus Unearned Income and Idle Land Promotion Act. Being a must-pass piece of legislation, it has attracted hangers-on who otherwise couldn’t convince Congress to do their interests. With a war going on, emerging budget deficits, and a struggling economy, it would be difficult for anyone to persuade a majority of the House and Senate to support, and the president to sign, legislation that shells out $17 billion to promote conservation in rural America. But put it in the farm bill, and it’s a cinch.
Not that such schemes aren’t open to criticism--especially if word gets out that the preponderance of the subsidies land in the pockets of large corporate farms, not small mom-and-pop operations. Some of the dough even makes its way to legislators voting to pass the legislation.
But people can’t criticize what they don’t know. So legislators have inserted language into the bill to treat taxpayer payments to farmers as proprietary information, exempting them from disclosure to journalists and the other Americans who are, well, paying for it. It’s outrageous, but then, so is the entire bill.
Mike Lynch is Reason's national correspondent.
