Time to End US Farm Subsidies

Hurray for even Nancy Pelosi! Let’s get rid of this $25 billion boondoggle (don’t I sound like MFGR?) right now!

[quote]Republican and Democratic congressional leaders rarely agree on a major issue. Yet both House Speaker Nancy Pelosi (D-San Francisco) and Minority Leader John A. Boehner (R-Ohio) have gone on the record as opposing the current $25-billion farm subsidy system, which Congress is rewriting this month.

Changing the system won’t be easy. They will have to battle the powerful agriculture lobby and its allies on the House Agriculture Committee, who are once again employing Norman Rockwell imagery to assert that farm subsidies are an all-American necessity that ensures an adequate food supply and alleviates farmer poverty.

But two seemingly arcane aspects of farm policy undermine both claims. First, farm subsidy eligibility is restricted to growers of only a few crops. Second, once a farmer’s eligibility is established, subsidies increase with the size of the farm. These make farm subsidies just another narrowly targeted corporate welfare program.

On the first point, producers of just five crops – wheat, cotton, corn, soybeans and rice – receive nearly all farm subsidies. In fact, only one-third of the $240 billion in annual farm production is targeted for subsidies. All other farmers – including growers of fruits, vegetables, livestock and poultry – receive nearly nothing.

This raises the question: If farm subsidies are necessary to produce an adequate food supply with stable prices and thriving farmers, why haven’t the growers of nonsubsidized crops experienced these problems?

Walk into any supermarket and you will quickly find yourself surrounded by farm products, from apples to oranges, beef to chicken, that are produced and distributed without farm subsidies. Yet their prices and supplies are relatively stable, and the farmers’ incomes are just as high as those of subsidized farmers. The free market works for all other farm production, and it can surely work for producers of wheat, cotton, corn, soybeans and rice.

These crop eligibility restrictions also undermine the second justification for subsidies: alleviating farmer poverty. If that were the purpose, there would be no reason to favor one crop over another. After all, lawmakers would never create a welfare program that was restricted to workers in certain industries. Creating a farmer poverty program that serves only growers of certain crops (regardless of income) makes no more sense. Today, a rice agribusiness can collect millions of dollars in aid while a low-income apple grower receives nothing.

Furthermore, most farmers are not poor. According to the Department of Agriculture, the average farm household earns $81,420 annually and enjoys a net worth of $838,875 – both well above the national average. Farm incomes are setting records, and the industry’s business failure rate is among the lowest.

Of course, some family farmers continue to struggle. But if subsidies were really designed to alleviate farmer poverty, then lawmakers could guarantee every full-time farmer an income of 185% of the federal poverty level ($38,203 for a family of four) for under $5 billion annually – one-fifth the current cost of farm subsidies.

Instead, federal farm policies specifically bypass family farmers. Subsidies are paid per acre, so the largest (and most profitable) agribusinesses automatically receive the biggest checks. Consequently, commercial farmers – who report an average annual income of $200,000 and a net worth of nearly $2 million – collect the majority of farm subsidies. Fortune 500 companies, celebrity “hobby farmers” and even some members of Congress collect millions of dollars under this program.

These farm policies are more than merely ineffective – they impose substantial harm. They cost Americans $25 billion in taxes and an additional $12 billion in higher food prices annually. Environmental damage results from farmers over-planting crops in order to maximize subsidies. By undermining the nation’s trade negotiations, subsidies raise consumer prices and restrict U.S. exports. Cotton subsidies undercut African farmers, keeping them in desperate poverty.

And as Michael Pollan, author of “The Omnivore’s Dilemma,” has written, farm subsidies contribute to obesity, rising healthcare costs and early death by subsidizing corn and soy (from which sugars and fats are derived) rather than healthier fruits and vegetables.

Even small farmers are harmed. Excluded from most subsidies, they must endure the lower crop prices, higher farmland costs and industry consolidation that result from subsidies to agribusiness.

Lawmakers would be hard-pressed to enact a set of policies more destructive to farmers, taxpayers, consumers, the environment, trade, global anti-poverty efforts and even our health than the current farm policies. Is Congress paying attention?

Brian M. Riedl is a senior fellow in the Thomas A. Roe Institute for Economic Policy Studies at the Heritage Foundation. [/quote]

latimes.com/news/opinion/la- … -rightrail

Now if we can only get the EU to come along as well…but then how would we support 300 kinds of cheese?

Would be cool. What chance of actually getting rid of them?

Unfortunately, about the same as reforming the sugar trade.

Unfortunately, about the same as reforming the sugar trade.[/quote]

Or winning the War Against Terror.

[quote]Nowhere is there a larger gap between the U.S. government’s free-trade rhetoric and its protectionist practices than in the sugar program. Through preferential loan agreements and tariff-rate quotas, the U.S. government thwarts price competition to maintain an artificially high domestic price for sugar–a price that can be twice the world market price or higher.

The program benefits a small number of sugar producers, but virtually every governmental and non-governmental survey concludes that the program results in a net loss of welfare for the U.S. economy, with U.S. consumers suffering the most. Direct costs to consumers due to higher prices could be as much as $1.9 billion a year and the net welfare loss to the U.S. economy nearly $1 billion. Moreover, the U.S. government spends close to $1.68 billion a year buying and storing excess sugar to maintain those artificially high domestic prices.

U.S. sugar consumers would not be the only winners if U.S. price supports and quotas were removed. Poor nations would benefit as well. Freeing just the U.S. market would boost global demand and raise world prices by 17 percent, increasing the annual export earnings of developing nations by $1.5 billion.

America’s sugar quotas pose a threat to multilateral and regional trade negotiations. U.S. trading partners routinely and rightly point to quotas as being inconsistent with U.S. demands for more open markets abroad. The sugar program has become an obstacle to lowering foreign trade barriers to U.S. exports.

The U.S. sugar program is a classic case of concentrated benefits and dispersed costs: a very small number of sugar growers receive enormous benefits, while the costs of providing those benefits are spread across the U.S. economy, specifically to consumers and confectioners. Repealing the sugar quota program will require more vigorous leadership from the president and the many members of Congress who represent far more people who suffer from the U.S. sugar program than who benefit.[/quote]

freetrade.org/node/70

How about ending this nonsense as well.

Oh, don’t go too far. Thanks to the high price of sugar, candy manufacturers have moved from Chicago to Montreal. :wink:

Sigh…

But Bush seems to be sending the right messages. Please if this goes through, let him veto it and veto it and veto it. ENOUGH!

[quote]WASHINGTON, July 25 — For the many critics of farm subsidies, including President Bush and Speaker Nancy Pelosi, this seemed like the ideal year for Congress to tackle the federal payments long criticized as enriching big farm interests, violating trade agreements and neglecting small family farms. Many crop prices are at or near record highs. Concern over the country’s dependence on foreign oil has sent demand for corn-based ethanol soaring. European wheat fields have been battered by too much rain. And market analysts are projecting continued boom years for American farmers into the foreseeable future. But as the latest farm bill heads to the House floor on Thursday, farm-state lawmakers seem likely to prevail in keeping the old subsidies largely in place, drawing a veto threat on Wednesday from the White House.

“The bill put forth by the committee misses a major opportunity,” Agriculture Secretary Mike Johanns said Wednesday. “The time really is right for reform in farm policy.” Faced with fierce opposition from the House Agriculture Committee, Ms. Pelosi and other Democratic leaders lowered their sights and are now backing the committee’s bill, in part to protect freshman lawmakers from rural areas who may be vulnerable in the 2008 elections. Instead, Ms. Pelosi helped to secure more modest changes, pushing the committee to provide $1.8 billion for programs that aid fruit and vegetable growers, generating support from lawmakers in states like Florida and California, Ms. Pelosi’s home, and deflating some traditional opposition to the farm bill.

At the same time, she pronounced the bill a “good first step to reform” by ending subsidies for the richest farmers — those earning more than $1 million a year — and closing a loophole that let some farmers exceed subsidy limits by owning partnerships in multiple farms. The bill also requires country-of-origin labeling for meat, a requirement favored by consumer advocates and small ranchers. “This bill represents reform,” said Representative Collin C. Peterson, Democrat of Minnesota and chairman of the Agriculture Committee. “We have made changes that nobody thought that we could ever do.” A group of dissident lawmakers led by Representatives Ron Kind, Democrat of Wisconsin, and Jeff Flake, Republican of Arizona, is still pushing a plan to curtail the subsidies sharply. But they have been largely outmuscled by the Agriculture Committee. It 46 members are slightly more than 10 percent of the House but their districts received more than 40 percent of all farm subsidies from 2003 to 2005, according to a database compiled by the Environmental Working Group, which opposes the subsidies.

Critics in Congress include fiscal conservatives who deride the payments as wasteful government spending and liberals who call them corporate welfare for agribusiness. All say the measure will simply perpetuate the overly generous subsidy system, at a point when American farmers are well-positioned to weather changes. “When farm prosperity is as good as it is right now, this is the time to reform,” said Representative Paul D. Ryan, Republican of Wisconsin and a member of the dissident group. “If we can’t reform these farm programs at this moment in our history, we will never be able to do it.” The group has proposed an amendment to the farm bill that would cut subsidies and increase spending on environmental conservation, rural development and nutrition programs, including food banks. It would end subsidies to farmers earning more than $250,000 a year, similar to the $200,000 cap proposed by the Bush administration. It would also substantially limit payments that farmers receive under guaranteed loan programs.

The effort by Mr. Kind has exposed divisions among House Democrats, some of whom argue that he could cost the party its new majority. The fear is that freshmen Democrats from rural swing districts could lose their seats if voters blamed them for lower farm subsidies. Mr. Kind rejected such assertions. “The vast majority of our new members benefit from our proposal,” he said. The White House, in a statement Wednesday, said that Mr. Bush would veto the farm bill in its current form because it was too expensive and would require raising taxes while fixing the subsidies. “I find it unacceptable to raise taxes to pay for a farm bill that contains virtually no reform,” Mr. Johanns, the agriculture secretary, said in a conference call with reporters.[/quote]

nytimes.com/2007/07/26/washi … ref=slogin

Gee, if Bush vetoed that bill it’d be, what, the third thing he’s gotten right in office, after signing on to that marine national park off of Hawaii and his stance on immigration.