Posted by: Reilly | May 14, 2008

Subsidize This

The mythical American Farmer comes again to the forefront of American policy, as Congress debates the $300 billion annual Farm Bill. The premise of the bill reads pretty well for a defense of a depression-era farmer out of a Steinbeck novel – pity, then, that there really aren’t many of them left

Today’s Wall Street Journal Opinion section points out some important points about this year’s debate

“This year farm income is expected to reach an all-time high of $92.3 billion, an increase of 56% in two years, making growers perhaps the most undeserving recipients in American history.”

With agricultural and commodity prices skyrocketing, it becomes particularly difficult to justify such exorbitant agricultural subsidies. But then again, that’s not the point – the subsidies are expected to keep American farmers farming (because that’s what we do in America).

However, the architecture of subsidy policy dates from the 1930’s, when 25% of Americans were farmers; now, just 2% of Americans are so employed, and the vast majority of agricultural products are produced at large or corporate farms. Viewed in that sense, it’s already failed to preserve the identity of the small farmer anyway. But the piece goes further

“A bigger scam is the new income limit to qualify for subsidies. Mr. Bush sought a $200,000 annual income cap, but Congress can’t bring itself to go below $750,000.”

Fascinating. Seemingly under the radar of most Americans, the Government is effectively doling out farm subsidies to some of the wealthiest members of its society – and mind you, Congress apparently exceeds even the President’s lofty concepts of wealth.

But that’s not even the largest problem – we continue to annoy the rest of the developing world (including our friend in NAFTA) with our protective agriculture policies, which have the adverse effect of pricing developing agricultural economies out of the market – ironic considering the competitive advantage they would maintain in a free trade environment.

But regardless, this is getting out of hand – add impetus for biofuels, rising fuel costs, and the highest commodity prices seen in decades, and you’ve got the equivalent of giving Exxon a welfare check and a tax break. Oh wait, we already do that too.

Complicating this, any congressman with rural constituents recognizes that voting against the bill gets them six cyanide pills and a game of Russian Roulette closer to political suicide. And, who can resist that well-paid farm lobbyist with that winning smile and near-earnest appreciation of working folk?


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