Today as the Senate is considering its version of the 2007 Farm Bill, the Wall Street Journal editorialized about proposals for massive subsidy and price support handouts to farmers at a time when their income is at an all-time high.
As the WSJ notes:
And yet Congress is writing another five-year farm bill as if this were 1936 and the Okies roamed the plains. The House has already passed a $286 billion bill, and the $291 billion version now moving through the Senate may be the largest feast of subsidies ever served up by Congress. The bill’s estimated $25 billion in direct crop payments, and another $10 billion in “emergency assistance” and insurance subsidies, are stacked as high as an Iowa silo.
The editorial also takes issue with the oft-repeated phrase that farm bills provide a “safety net” for farmers during bad times:
And though this is a Democratic Congress that claims to care about “inequality,” the USDA says about two-thirds of this farm aid goes to the wealthiest 10% of farms. It is a direct transfer from taxpayers and poor consumers to mostly rich corporate farmers. President Bush has requested that subsidies only go to farmers with incomes below $200,000, but the Senate bill has no income caps for full-time farmers. One proposed amendment (by Minnesota Democrat Amy Klobuchar) would establish a cap of $750,000 in income, but that’s still about 14 times the average family income in America, and the farm lobby is fighting even that. The House subsidy ceiling is $1 million a year, which after fancy accounting would exclude no corporate farms at all. Yet all of this is defended as a “safety net.”
CEI has a video on some of the most egregious aspects of 2007 farm bill proposals. Check here on YouTube.
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Read the article critically as a story problem in an elementary mathematics classroom. “The House passed a $286 billion bill…” and $291 billion version (is) moving through the Senate…” with allocations to farmers for “$25 billion in direct crop payments, and another $10 billion in ‘emergency assistance’ and insurance subsidies.”
Do the math. Even taking the largest amount for farmers, $35 billion and the lower House allocation of $286 billion for the life of the bill, its still only 8% going to farmers. Not “about $4 of every $5…(will) go straight into the pockets of growers…”.
Read the entire farm bill (give yourself plenty of time, its a tome). Most money in this farm bill, as in all farm bills, is allocated to fund free and reduced school lunch programs, WIC programs and food welfare programs. The government buys food and redistributes it among citizens who cannot afford to purchase enough groceries on a limited income.
In 2007 farmers will not receive Loan Defiicency Payments because crops are priced higher than the farm bill allows for payments.
And, I for one, am a farmer who is more than happy to take my $9.47 soybeans (we sold at harvest) over an LDP on $5.00 beans this year. And I will feed my $3.50 corn to my dairy cows, smile at $18.00 cwt milk prices, and not expect any government support to supplement my income this year.
But, if farm gate prices slide back to historical average prices, you may be very appreciative that farmers are willing to work for the meager supplement that the farm bill makes available to farmers so we keep farming, and you keep eating.
While it is true that distribution of farm program money is broken and has been for some time, farmers have been hit with rapidly rising costs of fuel (doubling in the the last three years) and equipment cost tripling in the last ten years. Add increasing land costs and taxes, yes food costs are rising. America has enjoyed cheap food in comparison to the rest of the world for the last 70 years. The last thing Americans want to do is start having to import food and become slaves to foreign countries as we have become for our energy needs.
What most forget is most of rising food costs are coming from transportation and packaging increases.