At a time when deficits continue to soar and worthy programs face cuts due to “sequestration” (the deal Congress made to ensure it would cut the budget, which didn’t happen), shouldn’t everyone be able to agree that profitable corporations don’t need welfare?
In other words, why are we still subsidizing hugely successful agricultural companies?
“The Senate began consideration Tuesday of a farm and food bill that would bring fundamental changes to how the government protects food growers during hard times,” the Washington Post reported. “The current farm act expires at the end of September…”
There are some reforms being proposed.
“The measure would end direct payments to farmers who may or may not actually plant crops, saving some $5 billion a year,” the Post explains. “A greater emphasis on federally subsidized crop insurance and a new program that compensates farmers for ‘shallow losses’ in revenue as measured over a five-year average would replace payments.”
“Sitting in the cab of a $350,000 John Deere tractor pulling a $150,000 Deere corn planter, Greg Carson embodies modern American agriculture,” the Post’s Robert Samuelson wrote last month. “It’s capital-intensive, high-tech, efficient — and now immensely profitable. Looking for a bright spot in the U.S. economy? The farm belt is it.”
He adds that farm communities are booming.
“Driven by high grain and soybean prices, farmers’ cash income hit a record $109 billion in 2011,” he writes. “Land values have followed high crop prices. Since 2006, an average acre of Iowa farmland has doubled in value. Last year, the increase was 33 percent to $6,708, reports Michael Duffy of Iowa State University. And farms sustain factories. In Cedar Rapids, a few miles from here, Cargill makes corn syrup and soybean oil; ADM produces ethanol; Quaker Oats makes cereal. Iowa’s unemployment rate is now 5.2 percent compared with 8.1 percent nationally.”
Samuelson is one of the Post’s more conservative columnists; he’s no fan of big government. But no one should be a fan of big government transfers of wealth from the poor and middle class (taxpayers) to profitable corporations.
A recent Cato Institute study shows just how big those transfers of wealth are.
The found that “farm subsidies redistribute wealth from taxpayers to often well-off farm businesses and landowners. ‘Farm income stabilization’ payments have recently fluctuated between about $13 billion and $33 billion annually. This is a welfare hand-out like food stamps, yet it goes to higher-income households. In 2010, the average income of farm households was $84,400, or 25 percent above the $67,530 average of all U.S. households. Moreover, the great bulk of farm subsidies go to the largest farms.”
Opinion-makers on the left have rightly decried corporate welfare and transfers of wealth from the middle class to the wealthy — they’ve termed it “reverse Robin Hood.”
So they should be on board with reforms in the Department of Agriculture, as should Republicans who continue to rail against government overspending.
Yet both sides are strangely silent, when they’re not directly encouraging more subsidies (the Senate’s version of the Farm Bill would add popcorn to the list of subsidized crops).
Republicans in the House have proposed cutting the food stamps program by $4.5 billion over 10 years. That’s the wrong fight to pick in an election year when the economy is still stumbling. Instead, similar savings (and more) could be realized by simply cutting subsidies.
The booming agriculture industries don’t need them.