The Public Policy

Farm Bill Follies

Tell me again, why do we need farm subsidies?

By 6.24.13

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The farm bills now before Congress… attest, if nothing else, to the inertia of politics. There is no “public interest” (a phrase often meaningless in Washington) in having government subsidize farmers. Food would be produced without subsidies. -- Robert Samuelson, author and economics journalist

The continuing saga of the Farm Bill reauthorization might make one laugh if it weren’t so tragic. America is broke, and the politicians in Washington contrived another Frankenstein-like piece of legislation that effectuates a cynical merger of food-stamp and agricultural subsidies designed to amass enough votes to obfuscate the excesses of both.

The legislation that went down to defeat in the House last week, thanks to a stalwart band of fiscal conservatives, including House Budget Chair Paul Ryan (R-WI), was a product of shameless but routine logrolling.

True, direct payments to farmers were to end; but Congress then expanded a program of subsidized crop insurance in which farmers pay a fraction of the premiums. Guess who pays the rest? The noted economics writer Robert Samuelson cites Bruce Babcock, an economist at Iowa State University who argues that the crop insurance program is more like “a farm income support program,” not insurance. Farmers’ premiums cover only 40 percent of costs. Again, taxpayers pick up 60 percent. The CBO puts the 10-year cost at $89 billion.

Farmers, on average, have incomes higher than most Americans. Many “farmers” are “hobby farmers” -- doctors and lawyers and investors who are basically absentee owners. Then there are the big farming operations which are really more like corporate operations, whatever their legal structure. We are no longer in the era of the Grapes of Wrath.

Hats off to the Wall Street Journal editorial page for an exquisite rant entitled “The Farm Bill Revolt,” which appeared last Friday. Commenting on the stunning defeat of the nearly $1 trillion farm-subsidy-and-food-stamp bill, the Journal hopes that the vote “marks the beginning of the end for the long alliance between urban Democrats who support food stamps and rural Republicans dependent on crop subsidies.”

Noting that the bill continued “indefensible” milk and sugar price supports, extended price support guarantees at no lower than 85 percent of current levels, and maintained subsidies for high-income agribusinesses and wealthy “farmers,” it went on to say:

Hundreds of millions of dollars were earmarked for such indispensables as… sheep and goat herder “marketing” subsidies, price controls on olive oil, and the promotion of “healthy plants.” You could have seen the conservative revolt coming a mile away.

Marlin Stutzman, a Republican congressman from rural Indiana, was squashed by the GOP leadership when he offered a reform amendment to split the bill in two. “Yet his amendment was ruled out of order, incredibly because the measure would violate ‘pay as you go’ rules-even as the $940 billion 10-year bill lumbered forward,” according to the Journal editorial. “GOP leaders underestimated that conservative blowback could knock over the entire bill.”

The good news, says the Journal, is that “The farm revolt suggests that these are the kinds of politically productive battles to fight.” Congressman Stutzman agrees, saying his rural constituents “care more about out of control spending and the debt than they do about farm subsidies.”

Is America in its late Byzantine stage? The scandal of the Farm Bill, along with our failure to reform runaway entitlement spending and rationalize the tax code, both individual and corporate, are signs that we have lost our mojo. Robert Samuelson believes that the survival of farm subsidies is “emblematic” of a much larger problem:

Government is biased toward the past. Old programs, tax breaks and regulatory practices develop strong constituencies and mindsets that frustrate change, even when earlier justifications for their existence have been overtaken by events. It’s no longer possible to argue that ag subsidies will prevent the loss of small family farms, because millions have already disappeared.

It is no longer possible to argue that subsidies are needed for food production, because one major agricultural sector — meat production — lacks subsidies and meat is still produced. 

As I have asked before on this site (here and here), when will the Republican Party act on its principles and stand up to the farm lobby and against over-spending and subsidies? Happily, those 62 House Republicans who voted “Nay” on the Farm Bill are in the vanguard of reform and a new gallery of profiles in courage.

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About the Author

G. Tracy Mehan III served at the U.S. Environmental Protection Agency in the administrations of both Presidents Bush. He is a consultant in Arlington, Virginia, and an adjunct professor at George Mason University School of Law.