Why are we subsidizing wealthy farmers?
There stands the farmer, his calloused hands clutching the plow as the sun beats down on him with only his ragged straw hat to protect him from its burning rays. And there stands the farmer's wife, her face raw and weather-beaten, her hands gnarled from years of toil, but yet she stands tall and proud in her faded gingham dress.
And there stands the other farmer who lives down the lane ... well, actually, he's sitting, sitting in his million-dollar, plantation-style home, surveying his acreage that stretches to the horizon, clutching in his manicured fingers a fat subsidy check from the U.S. government.
On Thursday, Congress passed a five-year $290 billion farm bill. Although President Bush had threatened to veto the bill, saying it pays too much money to wealthy farmers, it passed by a veto-proof margin in both House and Senate.
Granted, about two-thirds of the bill will pay for much-needed nutrition programs such as food stamps and emergency food aid for the needy. But an additional $40 billion is for direct subsidies to farm owners, many of whom don't even work on their farms.
Under the bill, couples with an annual income of up to $1.5 million still would receive subsidy checks, as would individuals making $750,000 a year. These farmers would receive direct payments from the government regardless of crop prices or other factors that might affect their income. And 60 percent of the payments would go to the wealthiest 10 percent of recipients.
According to the Farm Income Forecast, total net farm income for 2008 will be $92.3 billion, up 4.1 percent from the estimated earnings for 2007 and more than double what it was in 2002 when Congress passed the last farm bill. In 2008, average farm household income is projected to be $89,434, up 6.3 percent from 2007 and 19.2 percent above the five-year average of 2002 through 2006.
While some small family farmers still work the land to scratch out a meager living, they are the exception. Nearly 65 percent of family farms are rural residence farms that produce relatively few crops and whose owners supplement their income by doing something other than farming. The large-scale farmers and agribusiness giants now dominate the farm industry.
But the new farm bill rewards entrepreneurs who don't even qualify as farmers. For example, the bill has generous tax breaks for Kentucky horse breeders and salmon fishermen in the Pacific Northwest.
One of the big problems with the farm bill is that it skews the natural market, creating winners and losers based on artificial support from the government. For example, Americans will pay $660 million over the next five years to protect the U.S. sugar industry from foreign competition. And, of course, we'll pay more at the checkout counter for sugar.
The bill also will pay farmers for weather-related farm losses from a new $3.8 billion disaster relief fund. That, however, is certain to encourage farming in areas subject to drought or other weather-related problems, areas where people wouldn't ordinarily choose to farm.
This year, thankfully, the bill includes subsidies for fresh fruits and vegetables, which have been excluded from previous farm bills. But the subsidies still are heavily weighted toward crops such as corn, wheat, rice, cotton and soybeans, which encourages overproduction of those crops.
The tax credit for refiners of ethanol, the corn-based fuel, also has helped prompt farmers to devote millions of acres to corn production. This year, the tax credit was reduced from 51 cents to 45 cents, while the subsidy for cellulosic ethanol, which is made from plant matter, was increased.
Still, the rush to plant corn for ethanol has disrupted the market for corn used to feed people and animals. Corn also requires the heavy use of fertilizer and pesticides, which pollute the environment.
A federal bailout of farmers may have been necessary during the Depression, when the exodus from the Dust Bowl and other factors threatened the nation's food supply. But why are we subsidizing farmers now, especially when crop prices and farm income are soaring?
Why, other than political expediency, are taxpayers forced to prop up an industry that already is thriving on its own? Certainly there is risk in farming, but there is risk in any business. The same rationale for subsidizing farmers could be used for subsidizing doctors.
Farm subsidies encourage overproduction of certain crops, waste resources, add to pollution, upset the food market and vex our trading partners. Welfare for wealthy farmers makes no sense.
Next time you sit down to a home-cooked meal, thank the farmer -- for raising the cost of the food by about 5 percent so far this year. In other words, thanks for nothing.
This story was originally published May 15, 2008 at 11:53 PM with the headline "Why are we subsidizing wealthy farmers?."