Thursday, July 8, 2010

Farm subsidies: Classic pork problem

Subsidies have been a staple in U.S. agriculture since 1933 when the Great Depression led to the adoption of the Agricultural Adjustment Act, the nation’s first comprehensive food policy legislation.

The basic premise behind agricultural subsidies is to supplement on-the-farm income, thereby allowing small, family farms to compete with large agribusiness operations and/or foreign producers who experience economies of scale or other production advantages. On the surface it appears to be a noble cause.

However, there are two problems with farm subsidies: 1) private businesses are being supported by public funds and 2) the intended beneficiaries are not the ones receiving the subsidies.

U.S. Senate candidate Dr. Rand Paul is taking some heat over his recent comments concerning farm subsidies. Appearing on a Kentucky Educational Television debate, Paul said, “I don’t think federal subsidies of agriculture are a good idea … They often go to large corporate farming and I’m not in favor of giving welfare to business.”

That’s a stark contrast from Hopkinsville Rep. Ed Whitfield’s position. Whitfield brought home $89 million in farm subsidies last year.

If my time in agriculture, both professionally and educationally, has taught me anything it’s that Paul is unequivocally correct.

In 2009, the top 1 percent of Kentucky farms collected 22 percent of the subsidy payments, with an average payment of approximately $66,000 per recipient. For example, Seven Springs Farms in Cadiz received almost $370,000 in subsidies despite having an operation of over 19,000 acres. To put this into perspective, the remaining 80 percent of farm operations received only 17 percent of the payments.

It’s hard to argue against the intentions of agricultural subsidies, especially when the image of the idyllic farm struggling to make ends meet comes to mind. Unfortunately, that idyllic farm image is long gone, yet the subsidies that accompany it still remain.

1 comment:

Anonymous said...

The name of that elephant is the commodity title, the all-important subsidy section of the bill. It dictates the rules of the entire food system. As long as the commodity title remains untouched, the way we eat will remain unchanged.
We would not need all these nutrition programs if the commodity title didn’t do such a good job making junk food and fast food so ubiquitous and cheap. Food stamps are crucial, surely, but they will be spent on processed rather than real food as long as the commodity title makes calories of fat and sugar the best deal in the supermarket.
We would not need all these conservation programs if the commodity title, by paying farmers by the bushel, didn’t encourage them to maximize production with agrochemicals and plant their farms with just one crop fence row to fence row.
And the government would not need to pay feedlots to clean up the water or upgrade their manure pits if subsidized grain didn’t make rearing animals on feedlots more economical than keeping them on farms.
Why does the farm bill pay feedlots to install waste treatment systems rather than simply pay ranchers to keep their animals on grass, where the soil would be only too happy to treat their waste at no cost?
However many worthwhile programs get tacked onto the farm bill to buy off its critics, they won’t bring meaningful reform to the American food system until the subsidies are addressed — until the underlying rules of the food game are rewritten.
This is a conversation that the Old Guard on the agriculture committees simply does not want to have, at least not with us.
Mr. Peterson’s farm bill passed the House by the smallest margin in years, and might have been picked apart on the floor if Representative Nancy Pelosi, the speaker of the House, hadn’t leapt to its defense.
But Senate rules are different, and Mr. Harkin’s bill will be challenged on the floor and very possibly improved.
One sensible amendment that Senator Byron Dorgan, Democrat of North Dakota, and Senator Chuck Grassley, Republican of Iowa, are expected to introduce would put a $250,000 cap on the payments any one farmer can receive in a year. This would free roughly $1 billion for other purposes (like food stamps and conservation) and slow the consolidation of farms in the Midwest.
A more radical alternative proposed by Senator Richard Lugar, Republican of Indiana, and Senator Frank Lautenberg, Democrat of New Jersey, would scrap the current subsidy system and replace it with a form of free government revenue insurance for all American farmers and ranchers, including the ones who grow actual food.
Commodity farmers would receive a payment only when their income dropped more than 15 percent as the result of bad weather or price collapse. The $20 billion saved under this plan, called the Fresh Act, would go to conservation and nutrition programs, as well as to deficit reduction.
What finally emerges from Congress depends on exactly who is paying closest attention next week on the Senate floor and then later in the conference committee.
We know the American Farm Bureau will be on the case, defending the commodity title on behalf of those who benefit from it most: the biggest commodity farmers, the corporations who sell them chemicals and equipment and, most of all, the buyers of cheap agricultural commodities — companies like Archer Daniels Midland, Cargill, Coca-Cola and McDonald’s.
In the past that alliance could have passed a farm bill like this one without breaking a sweat. But the politics of food have changed, and probably for good. If the eaters and all the other “people on the outside” make themselves heard, we just might end up with something that looks less like a farm bill and more like the food bill a poorly fed America so badly needs.