farmers

Two GOP Senators Say Get Rid of Ethanol Subsidies; Gore Says His Support for Ethanol Subsidies a Mistake

by Fran Smith on November 23, 2010

in Agriculture, Energy, Environment, Ethanol, Global Warming

In the Washington Post’s “Plum Line” column today Greg Sargent focuses on two GOP senators’ campaign to get rid of the ethanol subsidies that are due to expire at the end of the year. It’s likely that the issue will be a divisive one on the Republican side, because some strong supporters of ethanol subsidies want to extend the 45-cent-a-gallon tax credit for blenders of ethanol and the tariff on ethanol imports.

Influential Republican Senators Jim DeMint and Tom Coburn are arguing that a clear message in the recent elections was that Americans want to reduce government spending, and the ethanol programs should be on the cutting block.

A surprise new opponent of ethanol subsidies from the other Party is former Vice President Al Gore, who was quoted as saying: “It is not a good policy to have these massive subsidies for (U.S.) first generation ethanol.” Gore noted that ethanol as a fuel has a small energy conversion ratio. He also explained his earlier support for ethanol subsidies as a product of his political ambition to become president:

“One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers in the state of Iowa because I was about to run for president.”

Many environmental and food aid groups – some of which had originally supported corn-based ethanol production - turned against this technology because of the diversion of corn crops from food to fuel production as well as the environmental damage of its production. CEI early on – in 2006 — called attention to the land and environmental costs of expanded ethanol production because of the subsidies and other incentives, especially the renewable fuels mandate. In 2007, CEI pointed to the unintended consequences of the ethanol program. Check out CEI’s global warming website for news about CEI’s continued efforts to get rid of the ethanol mandate, subsidies, and tariffs.

Government-Sanctioned Lying and Reparations Increase National Debt: The Pigford Class Action

by Hans Bader on August 12, 2010

in Agriculture, Bailout Watch, Economy, Employment, Energy, Environment, International, Legal, Natural Resources, Odds & Ends, Personal Liberty, Politics as Usual, Regulation, Sanctimony, Stimulus to Nowhere, Trade, Zeitgeist

There are only 36,697 black farmers in the entire country, but in a class-action lawsuit, more than 86,000 African-Americans claimed to have suffered from race discrimination by the Department of Agriculture during their time as farmers.   They are getting “‘virtually automatic’ $50,000 payouts” at taxpayer expense, thanks to the Obama administration.  It has repeatedly loosened the requirements for payouts in a class-action lawsuit against the government known as the Pigford case, in order to make such payouts possible.  Essentially, the Obama administration is using the case to award race-based reparations to people who never farmed or even intended to farm.  The government’s collusion with the plaintiffs’ lawyers in this case will ultimately cost taxpayers billions.

The next time you hear President Obama on TV challenging his critics to identify any unnecessary government spending that can be cut, and suggesting that there is no waste to be found in the federal budget, keep this case in mind.  In 2009, Obama made a big show of ordering his cabinet to come up with a measly $100 million in cuts even as he submitted a record budget request of $3.67 trillion (not counting hundreds of billions in “emergency” spending).  That $100 million was less than 0.003 percent of the budget, and is much smaller than the billions that the government will ultimately waste on the Pigford case.

The Congressional Budget Office has estimated that “President Obama’s policies would add more than $9.7 trillion to the national debt over the next decade.”  That’s despite the fact that there are $3 trillion in tax increases built into the president’s budget.

Obama recently signed a deficit-expanding $26 billion public-employee bailout.  The stimulus package is now expected to cost $75 billion more than predicted.  The stimulus package is using taxpayer subsidies to replace U.S. jobs with foreign green jobs. It also destroyed jobs in America’s export sector.

One issue in the Pigford case was the fact that people with bad credit ratings didn’t get loans from the Agriculture Department as often as people with good credit ratings.  That was deemed “discrimination” because African-Americans tended to have lower credit ratings on average than whites.

Financial “Reform” Harms Farmers, While Leaving Corrupt Government-Sponsored Mortgage Giants Unreformed

by Hans Bader on August 11, 2010 · 2 comments

in Agriculture, Deregulate to Stimulate, Economy, Environment, Politics as Usual, Precaution & Risk, Regulation, Sanctimony, Zeitgeist

Farmer Betsy Jensen explains how the so-called financial “reform” bill signed by President Obama will harm agricultural markets, and thus farmers, in today’s New York Times. Particularly damaging will be its restrictions on derivatives, which “traders who buy and sell wheat or corn” use to insure themselves against risk. Worried farmers like Jensen are “well aware that the system would not function without” those traders. Farmers like Jensen also use derivatives to protect against swings in prices for the crops they sell, and “swings in the cost of fertilizer, fuel and other staples.”

While it imposes harmful red tape on agriculture, the financial reform bill deliberately does nothing to reform the corrupt government-sponsored mortgage giants Fannie Mae and Freddie Mac, even though Treasury Secretary Geithner admits that they were a “core part of what went wrong“ in our financial system.  The bill’s 2,315 pages are full of payoffs for special interests.  (Obama received $125,000 in contributions from Fannie Mae and Freddie Mac executives.)

At Obama’s direction, Freddie Mac and Fannie Mae ran up tens of billions of dollars in losses bailing out out delinquent mortgage borrowers, some of whom had high incomes. The Obama administration rewarded them for going along with this by showering their executives with $42 million in pay.

The financial “reform” law’s restrictions on derivatives could cost U.S. companies as much as $1 trillion in lost capital and liquidity.  While regulators may ultimately decide to exempt farmers themselves from many of those harmful restrictions, it is doubtful that they will exempt the agricultural traders who are needed to provide “enough liquidity, or money” for the agricultural markets to “function” properly.

“Farming” for dollars in the EU

by Fran Smith on July 17, 2009

in Agriculture, International, Trade

Most of us knew that the European Union’s system of farm subsidies, the Common Agricultural Policy (CAP) gives out huge amounts to farmers in the EU countries.  What hasn’t been clear is that a lot of the monies go to businesses only tangentially connected — if at all — with farming.

Now the New York Times has an in-depth article detailing how large sums of CAP money go to such businesses as asphalt manufacturers, and to such people as the Queen of England, Prince Charles and other royal and — very wealthy — individuals.

Here’s some NYT  information about the cost of these subsidies:

The E.U. pays out more than half its annual budget, around €53 billion, in farm subsidies, four times as much as the United States. The subsidies cost each European Union citizen around €110 a year, according to the European Commission, a healthy chunk for a family of four. The money is raised from customs duties, sales taxes and a contribution made by each E.U. country based on its wealth.

“Individual families are paying double for their food — one for their higher prices in the stores and then for the taxes that they pay out for subsidies,” said Stefan Tangermann, an agricultural economist.

The article details some of the more far-fetched of the non-farm recipients:

That is how a gravel manufacturer like Arids qualifies for farm subsidies, as did Pasquina, which collected €1.13 million for its new asphalt factory in Spain. The Spanish utility Endesa also was eligible — it received €466,000 for installing electrical connections.

These aren’t just funny stories, but the policy has real economic consequences for taxpayers and the poor in developing countries:

Farm subsidies are a controversial economic tool — a sacred cow for politicians in the United States and Europe. But some economists view them as trade-distorting instruments that hit the pocketbooks of taxpayers and destroy the livelihoods of farmers in some of the world’s poorest countries by prompting Western states to dump surplus food there while also reaping the benefit of subsidies.

Check out CEI’s video on U.S. farm subsidies, “Farming for Dollars.”