Farm Programs In Need Of Overhaul
One good thing farm subsidies have going for them is that people understand they’re complicated.
Of course, crime and the criminal justice system are complex as well, but that doesn’t seem to stop anyone from spouting simplistic slogans (“lock ‘em up and throw away the key”) or making punchy 30-second political commercials about how to get Tuff on Crime.
Still, the awesome complexity of the relationship between commodity loan rates, target prices and deficiency payments keeps most people from trying to reduce it all to a 10-second sound bite.
The simplest part of farm subsidies is pointing out what’s wrong with them. A juicy study recently done by the Environmental Working Group of Washington, D.C., is chock-full o’ wonderful nuggets such as: During the past decade, $1.2 million in farm benefits has been sent to the Beverly Hills, Calif. ZIP code 90210. Another $1.4 million has gone to residents of Marco, Fla., an island golfing resort so exclusive that you practically have to be rich to have heard of it. A total of $1.8 billion in farm subsidies has gone to residents of the nation’s 50 largest cities. Sitting in mid-Manhattan while collecting those gummint farm checks - boy, what a sweetheart deal.
Aside from the fact that farmers are not required to live on their farms to qualify for the subsidies, the study also colorfully points up that income is no object to subsidization. Sam Donaldson of ABC News, who is paid handsomely for annoying politicians, received $97,000 in subsidies over two years for his sheep ranch in New Mexico. One of the recipients of federal largess on Marco Island, who received more than $196,000 from the government, actually made his living from the construction company, golf course and Ford dealership he also owns.
Just as we get ready to work up a full head of indignation and shriek, “Off with their heads!” - or at least, “Off with their subsidies!” - we get another heartbreaking study about rural poverty and the continuing disappearance of the family farm. Anyone who ever has been to a farm foreclosure sale and watched a longtime farmer lose his life’s work never forgets the looks of inexpressible anguish on those tough, weathered old faces. So, why do all these good, hard-working farmers keep going broke while corporate farmers, such as Tenneco, rake in federal bucks? Is there any way to fix this mess?
Yep, there is. But the answer, alas for the 10-second sound bite, is complicated.
“Get the gummint out of it” is not the answer - it’s a recipe for disaster. Sorry, Adam Smith does not apply here. Please recall what you know of the early 1930s. The first thing to realize is that the government, representing all of us, has a big stake in both a stable food supply and the environment. Long term, a firm hold on a wonderfully productive source of food in this crowded world is a real nice thing to have.
Complicated though all this is, it is not beyond the human mind to figure out how to rectify such glaring errors as the subsidization of Tenneco, Sam Donaldson and mohair.
The deeper problem is that we are not subsidizing agriculture; we are subsidizing agribusiness. General Mills and Kellogg’s consistently have returns of 35 percent and higher, and 16 cents of every dollar spent on food in America goes to Philip Morris and ConAgra, the two largest publicly held agribusinesses in the country. Cargill Inc., Continental Grain and the French conglomerate Louis Dreyfus Corp. do not need our money.
One way to reduce deficiency payments (just one of the several kinds of subsidies) without hurting farm income or the public is to raise significantly the commodity loan rate (another piece of the subsidy puzzle). The National Family Farm Coalition points out that at the same time, we would have to institute a grain reserve and storage program to work along with conservation and supply management programs.
The commodity loan rate is the level at which farmers can put their grain on loan to the government. Both domestic and world market prices are influenced heavily by the commodity loan rate. It serves as both a floor and a ceiling for market prices. Because it has been set far below the cost of production, the low loan rate drives market prices down, which gives agribusiness an intrinsic subsidy while also requiring deficiency payments to help keep farms operating.
Of course, it’s all more complicated than this, but better we should pay to keep farms in production than subsidize the evil heirs of Snidely Whiplash at the cereal companies.
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