The Farm Policy End-Run
In an article entitled "'Secret farm bill' primed for passage in debt deal," The Hill's Erik Wasson reports that "[l]awmakers on the House and Senate Agriculture committees are trying to write a new five-year farm bill through the supercommittee process."
Delayed in 2007 for a year and finalized in 2008, the current farm bill expires in 2012. In an election year, farm-state legislators would like to avoid a public debate on farm subsidies, one of America's most senseless, profligate relics of FDR's New Deal.
We well know the economic conditions which led to last summer's only semi-serious debt ceiling deal, which in turn produced the twelve-member Super Committee.
America is experiencing a lingering recession that was exploited, with arguably negative effect, by the administration and Congress to justify massive spending bills for "stimulus" and bailouts. The nation's balance sheet is bleeding. The debt deal and the Super Committee are institutional acknowledgements that, unless Washington acts quickly to reduce spending, there is little prospect for real recovery.
A "recovery" twice hyped by the administration has been jobless. The unemployment rate remains at about 9 percent. If an honest accounting were made of underemployed Americans and discouraged job-market drop-outs, unemployment could register at Great Depression levels.
Employed or not, American consumers face inflationary pressures from food and fuel prices. Food-stamp use has reached record levels. For reasons friendly to farm state legislators, food stamps are funded by the Farm Bill.
Economic circumstances demand that, among other cost-cutting initiatives, Washington seriously address farm policy.
Corn prices have soared more than 70 percent in two years. Meat prices increased with fodder costs. High world wheat prices have contributed to hunger and unrest in third-world countries. Prices for other farm commodities are reaching record levels. Increased demands from a growing world population have made raising row crops extremely profitable.
By increasing demand for corn, bio-fuel subsidies also raise food prices, even though ethanol cannot compete in open markets.
Although America faces massive deficits, the federal government continues to subsidize certain agricultural commodities.
To preserve agricultural subsidies, congressional farm-state "conservatives," whose agribusiness and bio-fuel special interests fund campaigns, conspired to add food-stamp funding to farm legislation. Doing so created an overwhelming congressional voting bloc that combined rural entitlements with the entitlement interests of urban legislators. The bloc was powerful enough to overturn a presidential veto of the Food Conservation and Energy Act of 2008 -- the Farm Bill.
A 2007 Heritage Foundation study by Brian Riedl reported that farm subsidies cost the average American family $320 a year in higher taxes and food prices. That number surely has grown in subsequent years. Nevertheless, the available Heritage data is useful for learning how subsidies affect taxpayers/consumers and farmers.
Most agricultural products reach markets without subsidies. Where I live in Pennsylvania, three of the five top-subsidized crops (wheat, cotton, corn, soybeans, and rice) are grown, though we consume them all. In Pennsylvania, a "large" farm is seldom more than 200 or 300 acres. Few, if any, local farmers are among the top 10 percent of huge farms and agribusinesses that receive about 75 percent of farm subsidies. Those who are in that group have been encouraged by generous subsidies to acquire often non-contiguous farmland to boost their payments. Area aid-recipients are far more likely to rank among the 80 percent of farms nationwide that divide only about one-tenth of agricultural subsidies.
Based on Heritage's 2007 data, 254,000 households (2000 U.S. Census, updated) and local economies in my congressional district lose $81.3 million per year to the taxes and higher prices for food caused by crop subsidies. According to the Environmental Working Group's crop-subsidy database, a relative handful of farmers in the district received total subsidies of $99.4 million during the prior eleven years. Ninety-five percent of our local farmers get little or no farm subsidies, yet families in the district, cumulatively, paid more every fifteen months than the total subsidies a few district farmers received in more than a decade (row crop subsidies only; "Other Farm Bill" expenditures were omitted for an apples-to-apples comparison).
Farm subsidies costing billions of dollars annually penalize most American citizens, even in areas like ours that contain hundreds of farms. Subsidies, however, are winners for members of Congress who receive millions each election cycle from large food, farm, and forest interests, not to mention agri-business lobbyists. Our congressman, T. Timothy Holden, is the second-ranking Democrat on the House Agriculture Committee. Despite the negative economic impact of farm subsidies on residents of his district, Holden is an enthusiastic supporter of the Farm Bill and farm subsidies. One wonders if the more than $80,000 in campaign contributions Holden harvests each cycle from agricultural special interests boosts his enthusiasm for a program which takes so much from his constituents' household budgets and from local economies.
Combining food-stamp and crop subsidies in farm bills creates a logical disconnect. Farm subsidies make all consumers, including food-stamp recipients, pay more for groceries. Yet a majority in Congress fails to see the irony in paying row-crop subsidies that reduce the purchasing power of food stamps as they help drive up the costs of the food-stamp program. Taxpayers overpay twice.
It's time for members of Congress from both parties to stand up to generous agricultural special interests and eliminate farm subsidies. There are better, far less expensive, more effective, and equitable ways to ensure food safety and supply. The Environmental Working Group lists a number of them at the end of this article.
If America is to disrupt the nexus of campaign contributions and taxpayer handouts to special interests, eliminating farm subsidies is an imperative.