March 29, 2024

Common Sense: Richer Farmers, Bigger Subsidies

Just about everyone, that is, except the powerful farm lobby and its allies in Congress, which every five years or so since the Depression has managed to fight off any meaningful reforms and actually increase farm subsidies.

And now they’re doing it again.

Last week House Republicans stripped the farm bill of its food stamp provisions, citing runaway costs and rampant waste and fraud in the $80 billion federal program. Fueling conservative outrage in Congress and the news media was a man who continued to collect food stamps after winning $2 million in the Michigan lottery two years ago.

But the bitter and much publicized debate leading up to the party-line vote tended to obscure what happened to the rest of the bill in the House: many of the same legislators up in arms about government spending and welfare abuse nonetheless voted for an increase in federal subsidies to wealthy farm interests.

“What’s remarkable and extraordinary about the farm bill is that, at a time of record crop prices and federal deficits, the House overwhelmingly passed a bill to increase subsidies,” Scott Faber, vice president for governmental affairs at the Environmental Working Group, told me this week. “Only an evil genius could have dreamed this up.”

The debate over food stamps provided a smoke screen for the agriculture subsidies, he said. “Unless you read the fine print in the agricultural press, you wouldn’t have noticed.”

The Environmental Working Group has long campaigned for changes to farm subsidies, citing among other concerns the negative impact that farm subsidies have on the environment.

“It’s hard to understand how anyone in the House who calls himself a conservative could support this, but many did,” said Chris Chocola, president of the free-market-oriented Club for Growth, which opposed the bill and lobbied against it.

Mr. Chocola is a former congressman from Indiana’s Second District and commutes to Washington from his 40-acre farm near Elkhart. He said he’s spent most of his life in agriculture.

“With the federal debt and deficit we have, to be subsidizing millionaire farmers makes absolutely no sense,” he said.

Many farm commodity prices, farm incomes and farmland values are at or near record levels, notwithstanding a severe drought in some parts of the Great Plains.

Earlier this year, the Agriculture Department projected that farm income in 2013 would be $128.2 billion, the highest since 1973, fueled by “record crop production levels” and “high prices for many crops.” Moreover, surging prices of farmland — 2013 was the third year of double-digit increases, according to the Federal Reserve Bank of Kansas City — have greatly improved farm balance sheets, the department said, and raised the net worth of many farmers.

Despite flush times in the farm belt, the bill the House passed last week provides what the Environmental Working Group calls the most generous farm subsidies in history. It increased crop insurance subsidies and raised price targets for a wide variety of crops, locking in price guarantees at their recent near-record levels.

Under previous incarnations of the farm bill, such subsidies expired every five years unless Congress acted to extend them. It always did, but at least there was an opportunity for periodic changes reform. Under the new bill the subsidies are permanent.

“It’s frightening,” Mr. Chocola said. “They’re locking in historically high commodity prices at taxpayer expense. And maybe the worst is that this is now permanent.”

The Senate version of the farm bill, although it retains financing for food stamps, contains many of the same generous farm subsidies.

Article source: http://www.nytimes.com/2013/07/20/business/richer-farmers-bigger-subsidies.html?partner=rss&emc=rss

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