Out-flanked on the right by Debbie Stabenow?
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Last year the new Republican ranking but long-time member on Stabenow’s committee, Thad Cochran (R-Miss.), voted against the Senate Farm Bill along with other Southern senators, including McConnell, on the grounds that its changes to the commodity subsidy title put major Southern crops at a disadvantage, says Peterka. The bill attempted to move away from subsidies to crop insurance, which is not without its own blemishes, i.e., subsidies for premiums. The House version also retained the price support program.
Again, the current crop insurance program leaves much to be desired as to efficiency and equity. According to the Washington Post’s editorial page, “Washington pays 62 percent of farmers’ premiums — at a cost of $7 billion for the 2012 crop year.” Moreover, “It reimburses administrative costs for the 15 insurance companies that sell the policies, to the tune of $1.4 billion in 2012, and also protects the companies against financial loss.”
The paper’s editors also claim that U.S. Department of Agriculture paid $11.4 billion to cover 2012 farm losses, much of it due to drought. Thus, “U.S. farmers could end up claiming $3.85 for every dollar in premiums, according to Kansas State University economist Art Barnaby.” This was for a year in which “the value of farmland and farmers overall earned $114 billion in net income, the second highest total in the past three decades.” (Emphasis added.) The crop insurance subsidy program has, over the last decade, cost $59.5 billion. “The more crops you grow, the more premium support you get (up to a maximum subsidy rate of 80 percent),” editorialized the Washington Post.
This whole scheme promotes excessive risk-taking and “favors big corporate farms over small family farms.” From this writer’s perspective, it also increases environmental externalities and the farming of marginal lands.
The Post also noted that Chairwoman Stabenow’s 2012 Farm Bill “would have compounded the error by expanding crop insurance to cover almost all farmers’ losses from price fluctuations as well as natural disasters” What a deal! Let’s face it: the myth of the Jeffersonian yeoman farmer is just that, a myth.
The Republican Party, dependent as it is on so many rural voters and high-producing agricultural states, is mostly mute or in a bad place on the matter of agricultural subsidies whether they be direct payments, crop insurance premium support or, let us not forget, ethanol subsidies and sugar cane tariffs. They stand tall when it comes to cutting food stamps for poor people but not agricultural subsides for farmers who participate in an economic enterprise that Robert Samuelson, the respected economics journalist, describes as “capital-intensive, high-tech, efficient — and now immensely profitable.”
“Running $10 billion to $15 billion annually, they do not do much good,” says Samuelson.
“For starters, they haven’t saved small family farms,” argues Samuelson. “Since the 1930s, when subsidies began, the number of farms is down 70 percent.”
Robert Samuelson maintains that “Farm subsidies are a metaphor for our larger predicament.”
“We no longer have the luxury-as we did for decades-of carrying marginal, ineffectual or wasteful programs. We can no longer afford subsidies for those who don’t need them or, at least, don’t need so many of them (including affluent Social Security and Medicare recipients),” says Samuelson.
“If we can’t eliminate the least valuable spending, then we will be condemned to perpetually large deficits, huge tax increases or indiscriminate cuts in many federal programs, the good as well as the bad,” warns Samuelson.
The GOP needs to develop some street cred on ag subsidies and not let Senate Democrats get around its right flank on fiscal issues through a quick two-step between direct agricultural payments and subsidized crop insurance premiums. It is time to cut both programs along with ethanol subsidies and sugar tariffs, too.
Photo: Wikimedia Commons
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
Was the President done in by the economy, or by the politics of the economy?