The Indianapolis Star gets it right on the farm bill and our endlessly depressing agricultural policy.
The bill even managed to bestow more largess on the highly subsidized and highly protected U.S. sugar industry. Under the legislation, the government promises to purchase excess sugar from producers at 23 cents a pound. The sugar then will be resold to ethanol producers at 2 cents a pound. Who makes up the difference? You, dear taxpayer.
The administration wanted to cut off payments for farmers with adjusted gross incomes of more than $200,000 a year. The bill instead begins to cap subsidies for those earning more than $750,000 a year in farm income or more than $500,000 in non-farm income.
In addition to the sugar subsidy, the bill contains another protectionist element, one that hurts hungry people around the world. The Bush administration wanted to be able to use foreign aid money to buy food at locations near where it’s needed by starving people. That move would reduce transportation costs and allow foreign aid dollars to be stretched further. The bill instead continues a requirement that all food aid must be purchased from U.S. farms.
That last part is truly sickening. Even as we have made food prices sky-high by correlating the corn and petroleum markets with our biofuel subsidies, we continue to hold the poorest countries back from developing beyond subsistence agriculture by flooding their markets with free American grain (and we’re going to make taxpayers pay the inflated price of that grain, by the way). So they get to suffer from high prices without benefiting from them. At least we could be buying their grain, which would encourage them to produce more of it. Instead we do the opposite.
The added sugar-ethanol subsidy is equally absurd, since the taxpayer will now be paying not only to double the price of his own sugar, but also to make that sugar cheaper for someone who wants to convert it to ethanol. In both cases, our government creates one problem, then creates another, bigger problem in order to solve it, then creates a third problem, even bigger, to solve that one — et cetera, et cetera, ad infinitum. And two or more wrongs cannot make a right.
Our farm policy is an excellent example of what happens when the government gets involved in markets. What began as a humanitarian measure to help a few struggling farmers evolved gradually into a means of keeping unsustainable farming practices in existence, and that evolved into a welfare program for the well-to-do, promoting even more unsustainable practices. Today, decades later, we lack even the political will to abolish the most insane programs we have — such as the one that actually pays non-farmers who live on former farmland.
There is no better argument than the state of farming today for keeping government out of the economy to whatever extent is possible. Well-meaning liberal policies will take every aspect of our economy down this road if we let them.