The Department of Agriculture no longer serves as a lifeline for millions of struggling homestead farmers. Instead, it is a vast, self-perpetuating post-modern bureaucracy with an amorphous budget of some $130 billion — a sum far greater than the nation’s net farm income this year. In fact, the more the Agriculture Department has pontificated about family farmers, the more they have vanished — constituting now only about 1 percent of the American population.
Net farm income is expected in 2011 to reach its highest levels in more than three decades, as a rapidly growing and food-short world increasingly looks to the United States to provide it with everything from soybeans and wheat to beef and fruit. Somebody should explain that good news to the Department of Agriculture: This year, it will give a record $20 billion in various crop “supports” to the nation’s wealthiest farmers — with the richest 10 percent receiving over 70 percent of all the redistributive payouts. If farmers on their own are making handsome profits, why, with a $1.6 trillion annual federal deficit, is the Department of Agriculture borrowing unprecedented amounts to subsidize them?
Advertisement
At least $5 billion will be in direct cash payouts. Yet no one in the USDA can explain why cotton and soybeans are subsidized, but not lettuce or carrots. In fact, 70 percent of all subsidies go to corn, wheat, cotton, rice, and soybean farmers. Most other farmers receive no federal cash. Yet somehow peach, melon, and almond growers seem to be doing fine without government checks in the mail.
Then there is the more than $5 billion in ethanol subsidies that goes to the nation’s corn farmers to divert their acreage to produce transportation fuel. That program has somehow managed to cost the nation billions, to send worldwide corn prices sky-high, and to distort global trade in ethanol at the expense of far cheaper sugarcane. And while the Obama administration discourages new production of far cheaper transportation fuels derived from natural gas, oil, shale oil, and tar sands — whose newly discovered known reserves are nevertheless reaching all-time highs — it is borrowing billions to pay farmers to grow uncompetitive fuel.
About every ten years or so, public outrage forces Congress to promise to curtail the subsidy programs. But when the deadline arrives, our elected officials always find a trendy excuse such as “green energy” or “national security” to continue welfare to agribusiness.
Free-market conservatives don’t dare touch the Department of Agriculture, given the senatorial clout of Midwest farm states and the mythology of the independent American yeoman farmer. Don’t expect left-wing Democrats to object either. In a brilliantly conceived devil’s bargain, the Department of Agriculture gives welfare to the wealthy on the one hand, while on the other sending more than $70 billion to the lower-income brackets in food stamps.
Originally, the food-stamp program focused on the noble aim of supplementing the income of only the very poor and the disabled. But now eligibility is such that some members of the middle class find a way to manipulate these grants. In fact, 2011 could be another sort of record year for the Agriculture Department, as it may achieve an all-time high in subsidizing 47 million Americans on food stamps — nearly one-sixth of the country.
If 30 years ago the public had sympathy for the strapped family who pulled out clumsy paper coupons to buy essentials such as rice and bread at the checkout line, today it is often turned off by the common spectacle in our superstores of plastic government credit cards being used for food purchases — freeing up the shopper’s cash for another basket of snacks, alcohol, and other non-essential goods.
The Department of Agriculture is now sending more than $1 billion to African-American farmers who sued the government, alleging past discrimination in federally subsidized farm lending programs. But such understandable reparations are experiencing mission creep, as the number of would-be recipients claiming past discrimination far exceeds the number who actually farmed — prompting all sorts of other racial groups to demand that they be given their own farm-reparation cash in equal measure.
The multilayered Department of Agriculture has no real mission, much less a methodology other than to provide cash to congressional pet constituencies. Its vital functions, such as crop reporting and forecasting, food inspection, and scientific research, are buried beneath politically driven cash transfers and could easily be farmed out to other agencies.
In these days of record federal deficits and unsustainable national debt, it is long past time to eliminate the department — or at least rename it “The Department of Food Subsidies.”
It could easily be argued, and probably proven, that the USDA killed the family farmer. Ensuring family-sized dairy farms could never ever make a profit with their price control schemes... a real shame.
Oh well, once the system collapses in on itself I predict a rapid uptick in family farms, haha.
To qualify for the corn and soybean cash handouts, farmers must provide production data to the government, either directly or via their crop insurance vendor.
This information is not the fudged crop reporting function data the feds are supposed to collect on a routine basis. Rather, these are hard numbers that offer a window into actual production potential and can readily be used to predict supply and future prices.
In reality, farmers are foregoing price volatility and true market uncertainty/price discovery in exchange for a few quaranteed carrots from the taxpayer.
Any guesses as to which private entities might be colluding with the feds to generate this legislation?
Today's Wall Street Journal features an excellent piece by James Bovard on the rampant fraud involving Food Stamps.
This entire morass of subsidies is outside the powers the federal government was supposed to have. The nation would be immeasurably better off if we could have stayed with the Founders' vision of strictly limited federal authority. By destroying those limits, FDR, LBJ and other politicians turned the Treasury into a commons for every special interest group to graze upon.
It makes you wonder what percentage of these handouts go to "farmers" in Iowa. Perhaps part of the problem is that Iowa's importance is inflated because of the early caucuses held there, resulting in candiates trying desperately to buy votes from special interests in that state.
I have repeatedly objected to the use of class warfare rhetoric by NRO contributors in the discussion of agricultural subsidies, and must do so again.
The small farmer was not killed by government policy. He was killed by advances in technology that make it possible for one man to farm thousands of acres, rather than the 160 acre homestead of a century passed. Crop subsidies, right or wrong, are paid out based on what is produced, not by what the farmers tax return says. The fact that the largest producers receive the largest subsidy payments, only proves that they produce more than anyone else. Does Dr. Hanson really want to argue for a progressive subsidy system akin to our progressive tax code?
Furthermore, the reason that melons and almonds are not subsidized is because those crops do not make a significant caloric contribution to the world food supply. The purpose of subsidies is to ensure an abundance of a good thing. The decision has been made repeatedly that having an abundance of wheat to assure that people don't starve for lack of bread is important. A similar decision regarding avocado's to protect the world supply of guacamole has not been made.
Finally, Dr. Hanson should know that the ideal of the yeoman farmer originated with Thomas Jefferson. The fact that Jefferson's yeoman farmers have responded to market incentives and expanded, or have moved to limit their personal liability by incorporating should not earn them Dr. Hanson's ire.
Subsidies do not work because they distort the free market. Why aren't conservatives content to make that argument? Why must we adopt the class warfare and anti-business tactics of the left?
Agreed Mr. Rancher. do the large farmers actually NEED the subsidies? if they're making plenty of money why should they get more from the gov't? also, can't wheat and rice be stored? If there's a bad year does the price have to skyrocket?
It doesn't matter whether or not the farmers "need" the subsidies. If they need subsidies, they are running an unprofitable business and need to be replaced by someone can run the business for a profit. You don't think that there aren't thousands of businesses operating in the U.S. at this very moment that "need" subsidies because they are unprofitable? Yet, in general we don't subsidize them. Why not? Because we have this romantic vision of the small family farmer that is by in large now a piece of history and is certainly not who is in general getting these farm subsidies.
So if there were more almond and melon growers, then they would also be entitled to subsidies?
As to the claim that subsidies are needed to ensure a reliable food supply. Are you actually claiming that before the advent of subsidies, nobody grew food? Are you trying to claim that if the subsidies stopped, farmers would quit the industry and go do something else?
If cheap food is what is needed, why not subsidize grocery stores as well?
Heck, cheap transportation is a necesity, right? Lets subsidize auto makers.
The fact is that farmers like getting large amounts of other people's money, and they use all kinds of obfuscations and self deceptions to justify it.
"The purpose of subsidies is to ensure an abundance of a good thing. The decision has been made repeatedly that having an abundance of wheat to assure that people don't starve for lack of bread is important. A similar decision regarding avocado's to protect the world supply of guacamole has not been made."
...and you think corn is the answer to our nutritional needs??
I just wrote on a previous post an indictment of the Department of Education.
Now it’s the Department of Agriculture’s turn.
Why do we allow this wasteful bureaucracy to exist?
First - they discriminate racially i.e. Pigford....or they are giving out compensation to people they didn’t discriminate against i.e. Pigford.
Second - either way not an effective use of our tax dollars, especially considering this case revolves around loans not agriculture. Why is the USDA in the loan business?
Third - its likely Department Of Agriculture exerts more energy on non agricultural pursuits than on agriculture...why does the USDA have a Graduate School that teaches Paralegal Studies, Hindi, and Grant Management (do we need to give graduate degrees in Tax Dollar Absconding Best Practices?)?
Fourth - When DofA does take the time to focus on agriculture, it’s mostly on how to prevent farmers from farming.
Bottom line – Government is so ridiculously inefficient that normal people simply can’t believe it. If I was president, DofA would be axed right after DofED.
Here is the real question: what are we going to do about this?
What are we going to do about all the billions or governments waste?
Are we really willing to do nothing? Or assume that there is little we actually can do?
I am frequently reminded that the Gingrich revolution was supposed to address these very issues, and yet here we are more than a decade later, still complaining about the same waste, fraud and abuse of the tax payers.
The further divorced from reality government is, the more entrenched it becomes.
Agriculture policy is a bizarre Alice in Wonderland interpretation of the laws of supply and demand that bears no resemblance whatsoever to the objective meanings of the concepts.
As near as I can tell, the purpose of the Department of Agriculture is to ensure that food is simultaneously:
- Plentiful
- Expensive
- Affordable by everyone
To accomplish these incompatible goals we:
- Reward the inefficient
- Punish the productive
I read James Bovard's book "The Farm Fiasco" like, what, 20 years ago? Has nothing changed?
Mr. Hanson as usual is spot on. We don't need to make fuel from corn. We can make gas out of coal. The Germans did it in WW2 and Sasol Inc. (symbol SSL) is doing it in South Africa. They make 100,000 barrels a day of fuel from coal and they are expanding their capacity. Its how South Africa got around oil sanctions during the apartheid era. We can have those plants here, say the heck with OPEC and eat our food.
Regarding ethanol (and probably answering my own question) is it too much to ask for a coherent energy policy?
If the goal is to significantly lessen our dependence on fossil fuels (an impractical and, quite frankly, stupid goal, but at least intellectually coherent), shouldn't we drop the tariff on imported ethanol? Corn as a feedstock is not nearly as efficient nor desireable due to competition with food needs as is sugar cane.
On the other hand, if the goal is less dependence on imports (also not necessaily sensible from an economic standpiont, but coherent) shouldn't we be going all out to develop domestic fossil fuel sources such as oil, coal and gas?
Of course, given a choice between A, B, both or neither, where both is the most expensive and least efficient and nothing is the least expensive and most efficient, the former seems to win the day every time.
The fact that most of the farm subsidy cash goes to the large entities ought to indicate to everyone what is really going on.
The feds are encouraging the consolidation of the industry, period. Technology is advancing rapidly which indeed drives consolidation, but that happens irregardless.
Consider this: The Conservation Security Program was advanced by USDA around 10 years ago in an effort to promote soil conservation via linking payments to stewardship. The Natural Resources Conservation Service administers and monitors this program and is required to certify that any farmer recieving payments is actually following the precepts and guidelines of the payment contract. NRCS is following through on conservation spot checks, but they are prevented from enforcing the rules because USDA knows the big boys really aren't conserving any soil.
Not only food and forest fall under their scope, the USDA also regularly attends horse shows and inspects the feet of show horses. To this end they have expended money on thermography machines, and also the same technology (gms) as "swabbing for bombs" and swab horses feet and have those samples tested.
Potted Owl and MarkW: Apparently you have taken issue with my criticism's of Dr. Hanson without reading my entire post. You will read in my final paragraph the following:
"Subsidies do not work because they distort the free market. Why aren't conservatives content to make that argument? Why must we adopt the class warfare and anti-business tactics of the left?"
I specifically pointed out that I am against subsidies. As a rancher I am particularly opposed to subsidies as my product (beef) is not subsidized, but I am forced to buy inputs (i.e. corn), the value of which has been artificially inflated by government policy. I am certainly not arguing for the subsidization of corn, melons, almonds or any other product. I am simply pointing out that some crops were chosen for subsidization based on their affect on the world food supply. Melon are just not that important to the world food supply. If conservatives are to make an intelligent argument against a policy, they must first understand that policy.
My issue is with the willingness of NRO contributors such as Dr. Hanson to employ the scorched earth rhetoric of leftist class warfare to bolster their argument. No conservative would argue that the "rich" should pay a higher tax rate because they can. Why do you feel it is acceptable to argue that "rich" farmers should not get subsidies because they do not need them?
The largest producers get the largest subsidy payments because they produce the most subsidized products. If you agree with the underlying policy, of having an abundance of a particular product, then it should not matter who makes that abundance possible. If you do not agree with the policy because you prefer to allow the free market to function without government intrusion, then there is no reason to attack the farmer who is simply responding to the market as manipulated.
In the future please read and understand the entire argument before responding.
I can't help it. I won't let you get away with this:
"No conservative would argue that the "rich" should pay a higher tax rate because they can. Why do you feel it is acceptable to argue that "rich" farmers should not get subsidies because they do not need them?"
If you don't grasp the difference, you have thrown your lot in with the leftists, lock, stock and barrel.
A man has a right to keep what he has earned, allowing for his fair share of the cost of minimal government. A man does not have the right to have handed to him that which someone else has earned simply because he engages in an occupation favored by the government.
The "rich" already pay far, far more than their fair share, and some of that which is taken from them at the point of a gun, is handed to those other "rich" people--farmers.
