Fertilizing Farms with Tax Dollars

The case against farm welfare

If you don't mind sweat, dirt, or the smell of manure, this is a great time to be a farmer. Incomes are up, land values are high, and global demand is growing. Oh, and if you're one of the lucky farmers, there's a bonus: a tap on the federal treasury.

Farm subsidies are an oddity in a competitive, capitalist economy. In what other business can you expect continuing government support, whether you need it or not? But by now, they are as American as kudzu, and about as hard to get rid of.

It was not exactly a surprise, then, that farm groups and their allies reacted badly when House Budget Committee Chairman Paul Ryan (R-Wis.), unveiled a list of spending cuts that includes paring $30 billion from agriculture programs over the next decade.

"We are concerned about cuts that might impact the safety net that supports our farmers," protested the American Farm Bureau Federation. The National Farmers Union warned the cuts would "do irreparable harm to American agriculture."

But the obvious question is not why Ryan proposes to trim farm subsidies by 20 percent or so. The question is why he doesn't cut them by 100 percent.

After all, they are at odds with everything conservatives believe in. They inflate the federal budget, they require bureaucrats, and they invite the federal government to meddle in areas where it is not needed.

The old rationale for these programs was that they redistributed income from affluent city slickers to struggling rural folks. But that excuse has about as much contemporary relevance as a horse-drawn plow.

In recent years, the average farm family has enjoyed an income about 20 percent higher than the average for all families, not to mention five times more net worth. In 2010, net farm income jumped by an estimated 20 percent, according to the Department of Agriculture, and net equity rose nearly 7 percent. The average farm family now makes $86,352 a year.

Being well-to-do will keep you off Medicaid and food stamps, but that rule doesn't apply when it comes to farm subsidies. Just the opposite: The more you have, the more you get.

"From 1995-2009," reports Environmental Working Group, "the largest and wealthiest top 10 percent of farm program recipients received 74 percent of all farm subsidies, with an average total payment over 15 years of $445,127 per recipient."

Farm groups insist these programs are the reason Americans enjoy an abundance of inexpensive food. But the real reason is that American agriculture is so productive, steadily producing more and more crops with fewer workers. Cheap meals are a tribute to the ingenuity and resourcefulness of our farmers, not the brilliance of our politicians.

Most farmers, in fact, manage with a minimum of federal help because they raise commodities that don't get subsidies. The great majority of government payments go to producers of just five crops: corn, wheat, soybean, rice, and cotton. Yet if you go to the grocery store, you will find racks filled with potatoes, strawberries, broccoli, tomatoes, lettuce, nuts, and carrots, grown without being heavily fertilized with tax dollars.

Here's how the market in those items works: Farmers plant the crops, harvest the crops, and sell the crops. If things go well, they earn a profit. If not, they don't.

Those farmers with a knack for making money stay in business and prosper. Those who lose money go bust. It resembles most of the other businesses in America—with the notable exception of the rest of agriculture.

We really have two agriculture systems in this country. One is based on generous federal subsidies (as with corn and wheat) or strict federal control of production and imports to keep prices high (as with sugar and dairy products). The other relies on open markets, the free interplay of supply and demand, the usual "creative destruction" of a capitalist economy, and the absence of guarantees.

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  • Tim||

    Green Acres was Arianna Huffington's greatest role.

  • Fiscal Meth||

    +1

  • ||

    JFTR, weren't the Gardners Austrian?

    Huffiana is from Greece!

    Not all accents sound alike to me.

    I'm coming to think there are only four accents to most Americans' ears: German, English, Vaguely Asian, and last but not least--Everywhere Else.

    Greek and Austrian are apparently in the Everywhere Else category.

    There are only a few American accents we recognize too, those being: Southern, Wisconsin, Boston and last but not least--Subsidy State.

    Subsidy State sounding like Billy Gibbons in "La Grange" and found in places where the locals are heavily addicted to farm subsidies.

  • Arnold the pig||

    Who are the Gardners?

    Ava Gabor was Hungarian.

  • ||

    That's what I meant.

    I guess Hungarians and Austrians all sound the same to me.

    And no, I guess Eva Gabor was no Ava Gardner either--Night of the Iguana was awesome!

  • Eb||

    Hey Arnold. Read any good books lately?

  • ||

    Yes, but Barack Obama sez now's not a good time to cut the budget for reals, so obviously nothing can be done.

  • Warty||

  • ||

    -1

  • The Fringe Economist||

    After all, they are at odds with everything conservatives believe in.

    Most people do not make judgements based on principle. Most make them based on their immediate current wants and desires.

  • ||

    like winning the Iowa primaries.

  • LarryA||

    And as any farmer knows, pulling 20 percent of your weeds doesn't do much good.

    Really neat wrap.

  • ||

    "Farm subsidies are an oddity in a competitive, capitalist economy. In what other business can you expect continuing government support, whether you need it or not?"

    GM, banks, medicine, insurance, aviation, transportation, Freddie, Fannie (are they private or not???)ad infinitum.
    The Gubermint's paws are so deep in EVERTHING that not to subsidize anything is to put an insurmountable burden upon them.

  • Fiscal Meth||

    Not really. It sucks that our govt is taking so much money from the private sector for subsidies and we would all be much better off if they didn't. But just because Ford suffers when they subsidize GM but not Ford, that doesn't mean that one industry suffers from a lack of subsidies when they subsidize an entirely different industry.

    Also, your arguing that it would be unfair to take subsidies away from farms while so many other industries or companies are getting them. But you're ignoing the fact that farming was one of the first to start getting them. If anything, that would mean that it was only fair that all these other industries should be subsidized to be able to compete with farming. Not that it works that way.

    Just because Republicans tend to like certain kinds of subsidies, doesn't make those subsidies exempt from the laws of economics. How about we consistently oppose all subsidies?

  • Colonel_Angus||

    I think what was meant was that it not subsidizing anything would be a burden on GOVERNMENT, which is why they won't stop. They wouldn't know what to do without that kind of power.

  • Fiscal Meth||

    "The Gubermint's paws are so deep in EVERTHING that not to subsidize anything is to put an insurmountable burden upon them."

    I took that last "them" to mean "those not being subsidized". If that's not what he meant then sorry fresno dan.

  • ||

    I can answer your rhetorical question: Fannie and Freddie are public.
    That's not even a question anymore, they took them over.

  • ||

    "The great majority of government payments go to producers of just five crops: corn, wheat, soybean, rice, and cotton"

    Add honey to that list, in ever increasing amounts, on federal AND state levels. I "invested" in about 400 hives, contracted with a manager to ship the gnats to Florida in the winter and back to Michigan in the summer, and reduced my property tax levels by over 38% in property tax deductions on 3 different parcels of land totaling over 660 acres. In addition there's the income tax deductions AND credits. Income isn't bad either from both ends; the pollination and the honey sales.

    You gotta learn to play the statist game.

  • @michaelmalody||

    Thanks Harvard for exposing how pervasive the subsidies are for people who know how to game the system. That's actually a complement to you, but a major indictment to the system.

    The economic reality of agriculture is this: we have a group of centralized producers of most of our food. That's the way they want it. They need subsidies & environmental immunity so their #GMO & heavily poisoned industrial produced food (which is damaging our drinking water, an even more important, scarce resource) can undercut decentralized locally produced food of much better quality & nutrition than local farmers. Most Americans would choose to purchase local if this is even close to an equivalent economic decision. The distortion of economics in this petrol dominated industry, sold to us under the guise of safety & promoted in our education system with a high carb, terribly destructive diet, ranks #3 to our terrible foreign policy (not that it's entirely unrelated) and Federal Reserve system as the key contributors to the fall of the American empire.

  • zoltan||

    corn, wheat, soybean,

    And we wonder why Americans are plagued by obesity and diabetes.

  • ||

    I always had a thing for Eva. Zsa Zsa was a bimbo. But Eva had class, a hell of a nice body and a great accent.

  • Barely Suppressed Rage||

    Yeah, there was a time when she was hot.

    Barbara Eden for me. And Mary Ann (Dawn Wells).

    Yeah, Barbara Eden. And fuck that Major Nelson - what a wimp. He had that smokin' hot genie, who had to do everything he told her, and all he kept telling her to do was pipe down and get back in her bottle, and not use her magic powers? Damn, that dude had no imagination.

  • creech||

    You ever see what he was banging in Dallas?

  • ||

    The thing to remember is the Eva Gabor was in her mid 40s when she was in Green Acres. She really aged well.

    And Barbara Eden was a goddess. I remember I saw her on CNN doing a USO show during Gulf War I in 1990. She was over 50 by then and still had a smoking body.

    And if they had repalled DADT for astronauts in the 1960s, Major Nelson would have come out. No straight guy lets Barbara Eden sleep in the bottle every night.

  • ||

    lol, I jsut got the sudden urge to watch some Green Acres re runs lol.

    www.internet-privacy.pro.tc

  • ||

    That was an excellent article. Who wrote it? And what did you do with Steve Chapman?

  • Colonel_Angus||

    I find it retarded when politicians come up with ideas like "paring $30 billion from agriculture programs over the next decade". They'll pass laws cancelling out the cuts later, so you need to cut that shit now.

  • CrackertyAssCracker||

    The thing about farming is : the crowding out effect is worse than the actual waste of money effect.

    Even if you want to be a plain-ole honest farmer, you really can't compete if you don't figure out some way to get attached to the government teat. Well, at least my father couldn't figure out how*. Maybe there are niche markets.

    *attempted: combination of hogs,corn,soybean & sorghum.

  • ||

    I came from a heavy agricultural area. Very odd politics. Farmers (and other rural folk) are conservative people, so ever for years they would vote for the Republican for president, then raise the flag and condemn the Democrat. But every two years they would vote for the incumbent Democrats in congress and the statehouse because they knew which side of the bread had the butter.

    Oh the fscal hawk Republicans did their damnedest to show how eager they were to nuzzle up to that money teat, but everyone knew the Democrats were the experts in pork ranching.

  • ConfederalRepublicBy2030||

    How about a complete and total end to all subsidies of any kind?

  • ||

    So tired of farmers getting taxpayer dollars to increase the price of their products.

    http://www.intellectualtakeout.....cy-united-

  • over age||

    I wish articles like this would be more descriptive. "Subsidies" often refer to tax breaks, which are always acceptable.

    If some rich ass corn farmer is getting tax breaks and some poor ass apple farmer isn't, then the problem shouldn't be solved by eliminating the tax breaks and taking more from the rich guy. It should be solved by implementing more tax breaks and taking less from the poor guy.

  • ||

    In this article, I believe he was using 'subsidies' to mean 'subsidies'. In agriculture, most of the money recieved from the government is in the form of direct payments, often tied to acres planted in specific products, crop insurance assistance, etc.

    All farmers recieve the subsidies (if they sign up) but a larger farm recieves more, because more acres = mo money.

    In terms of deductions, all farmers, AFAIK, are all treated similarly. I raise cattle, but 95% of everything I own is "farm related" and can be deducted in one fasion or another. I have an accountant, so I don't really know how it all works in detail.

    Hope this helps.

  • zoltan||

    Another subsidy farmers get is water. The government sells them water at 10% the rate at which it is sold to water companies.

  • Colonel_Angus||

    I'm going to be a good libertarian say fuck tax breaks. Everyone should be treated the same. Tax rate cuts for everyone are always acceptable. Tax breaks or deductions are too much like subsidies and market manipulation, and should not be considered desirable to libertarians.

  • over age||

    Taxes are theft, period. Therefore, anything that lessens one's burden is good. Equal oppression (even if it's less oppression than some previous, arbitrary amount of oppression) is still oppression.

  • Realist||

    Subsidizing anything is wrong.

  • DaveInAustin||

    Don't forget Mitt Romney's drivel about farm subsidies during the Republican debates on Nov 28, 2007, and Mayor Giuliani concurrence. He said that farm subsidies would help make us energy independent.

  • ||

    ALL subsidies should be ended. The lions share of the money goes to the giant agribusineses that simly Do Not Need it.

  • قبلة الوداع||

    ThaNk U

  • goallen||

    ty rights, etc. seem like a more accurate measure of freedom than democracy.

  • kangzhu||

    This plan has no merit

  • دلعني||

    good man

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