The LA Times has a good piece today on how soaring food prices and record farm incomes are changing the calculus of farm politics:
The Agriculture Department forecasts that the average farm household will earn more than $89,000 in 2008, up 6.3% from 2007. That’s a third higher than the average U.S. household income, which is projected to be $67,000.
Despite that, farm-bill negotiators are fighting to keep $5.2 billion in direct payments, which go to farmers regardless of how much they earn or whether they are growing a crop.
Let’s look closer at that average farm household income statistic. Ninety-two percent of farm-dwellers derive either all or most of their income from sources other than farming or subsidies. Average household incomes for this group have increased steadily since 2006. These farmers are expected to earn between $63,500 and $83,500 this year.
The other 8 percent — commercial farmers who derive most of their income from farming and subsidies — earned an average of $200,000 last year — an increase of 22 percent from 2006. This year, income for this group is projected to hit $230,000 — another 9.3-percent increase. The USDA, which calculated these estimates, reported last year that the windfall for commercial farmers is due in large part to “demand from the rapid expansion of ethanol production.”
According to the Environmental Working Group’s Farm Subsidy Database, the top 8 percent of farm-subsidy recipients received 57 percent of the payments in 2006, for an average payment of $65,613. (The top 20 percent of recipients get 80 percent of the payments.)
Right now, Congress is attempting to renew farm subsidies for five more years, even though the vast majority of the payments go to farmers who are making six figures a year. The chief obstacle is President Bush, who has threatened to veto the bill in its current form. Bush, who signed the massive 2002 farm bill, has set an unbelievably low bar for Congress to clear, calling only for modest spending restraint in the wake of record farm incomes. Yet Congress cannot even bring itself to cap payments to millionaires, among other simple reforms.
Bush should renew his call for a one-year extension of the 2002 farm bill so as to leave the debate over new farm legislation to the next president. With any luck, it will be the anti-subsidy senator from Arizona.