Politics & Policy

Broken-Down Farm

The arguments against the U.S. farm program are numerous and compelling. In an op-ed in Tuesday’s Los Angeles Times, the Heritage Foundation’s Brian Riedl laid them out succinctly: The program is nothing more than a massive income transfer from American taxpayers to a small handful of very large producers who grow just a few crops; the program can’t be serving the purposes its defenders claim it does — ensuring a stable food supply and keeping farmers out of poverty — considering that a majority of American farmers do just fine without government aid; and disputes over the large U.S. and EU farm-subsidy programs have opened an apparently unbridgeable divide between developed and developing countries in the current round of multilateral trade talks. The only conclusion one can reasonably draw is that the system is broken and ought to be scrapped.

But let’s put aside that ideal solution and focus on what’s possible right now. This Thursday the House of Representatives is scheduled to begin debate on the 2007 farm bill, which was reported out of the House Agriculture Committee last week. Nancy Pelosi may call the committee’s bill a “reform,” but it contains nothing worthy of that name. Indeed, it is the very embodiment of the status quo.

Large payments to landowners who don’t farm would continue. Price supports that shield farmers from market signals and result in massive surpluses would be maintained. Pelosi’s protests to the contrary, millionaires would still be eligible for large farm-subsidy payments by making use of a few loopholes in the system. A handful of agricultural giants — the top 10 percent, to be precise — would continue to receive almost three-quarters of the money, as they have every year since 1995.

Pelosi’s support will have the unfortunate effect of giving a lot of Democrats cover to vote for the bill, even though some of the nation’s most prominent environmental and rural-poverty activist groups oppose it vehemently. This is too bad. After Republicans in Congress lost their zeal for restraining, much less reducing, government spending, these activist groups started to look like they might bring the Democratic party around to the side of reform.

The Environmental Working Group, for instance, has been hammering away at Pelosi ever since she announced her support for the committee’s bill. Tuesday evening, the group published data on its website demonstrating that a provision barring payments to farmers earning over $1 million per year would affect only 0.2 percent of all federal farm-subsidy recipients. This provision is the fig leaf of reform Pelosi invokes to convince skeptical Democrats to vote for the bill.

She might still succeed, but she will have to overcome an assault on the bill that fellow Democrat Ron Kind of Wisconsin is preparing to mount. Earlier this year Kind teamed up with conservative stalwart Jeff Flake of Arizona and proposed a plan called FARM 21, which would divert a portion of farm-subsidy payments to tax-free risk-management accounts for farmers. The plan would have yielded substantial savings, but, after Pelosi announced her support for the status quo bill, Kind and Flake realized that they would have to offer a more modest proposal if they were to have a chance at success.

Their scaled-back plan would achieve $5–10 billion in savings over the next five years by phasing down some payments, with gradual rate cuts increasing over time at different speeds for different crops. For instance, rate cuts for corn and soybeans would be phased in more quickly, because those crops are benefiting the most from the ethanol mandate and the biofuels push.

This would at least begin to address the most urgent problems causing the international trade deadlock. It would also start to mitigate the wasteful spectacle of billions of dollars’ going to landowners who don’t farm. It would save U.S. taxpayers a modest amount of money, with a portion of the $5-10 billion going toward deficit reduction. Most of the savings, however, would go to increased spending on conservation and nutrition programs (food stamps).

This is, sadly, a sign of the times. In 1994, a wave of conservatives took over both houses of Congress and enacted the 1996 “freedom to farm” reforms from a free-market, limited-government perspective. Those reforms fell apart over the next five years as congressional Republicans abandoned them one at a time for the sake of political expediency. In 2002, the Republican Congress enacted the most expensive farm bill in American history.

This year, a wave of Democrats has taken over both houses of Congress. The coalition Kind and Flake have built thus consists of more Democrats than Republicans, with concerns about the environment and equality replacing fiscal and personal responsibility as the primary rallying cries for the reformers.

For now, we think almost any reform along the lines of what Kind and Flake have proposed is a step in the right direction. But it is a little disheartening to see so few Republicans standing up against such a profoundly unconservative, intrusive, and wasteful government program. Republicans can’t rebuild their brand as the party of fiscal responsibility by voting right only on the easy issues. Every now and then they’re going to have to do what’s right even when it’s hard.


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