Cash on the Scarecrow, Pork on the Plow

Matt Welch | April 15, 2005

John Cougar Mellencamp, as we know too well, was born in a small town. Seymour, Indiana, to be exact, population 20,000. The Coug is also the co-founder of Farm Aid, the 20-year-old annual concert to raise money and awareness for the beleaguered family farm. As he explained in an entertaining Washington Post profile last December,

"When Reagan was president, the way they treated the small family farm, running them out of business," he says. "How in the hell can a small family farm compete with the laws leaning toward corporate farming? What's the little guy going to do?"

Well, one option for "the little guy" -- including the little guy whose blood relative has sold 30 million records domestically -- is to gobble up hundreds of thousands of our tax dollars.

According to the good folks at the Environmental Working Group, who maintain an eminently searchable database of farm subsidies, there were 34 recipients with the last name of "Mellencamp" between 1995-2003. Of those, a full 22 come from the Hoosier State, including 12 in the small town of ... Seymour! Here's a list of Seymour's subsidized Mellencamps:

$383,673.00 James A. and Michael Mellencamp
$249,590.95 George Mellencamp
$157,219.56 David K. Mellencamp
$152,639.65 Mark Mellencamp
$152,424.00 Gary W. Mellencamp
$110,052.72 Mary Mellencamp
$46,172.47 Elsie Mellencamp
$30,527.87 Matthew Grover Mellencamp
$10,929.31 Frederick J. Mellencamp
$2,582.14 Jerry Ross Mellencamp
$1,015.00 Victor H. Mellencamp
$420.00 Andrew Mellencamp

That's $1.14 million for the small-town Mellencamps. Their other 10 subsidy-receiving Indiana namesakes, incidentally, farm within a 50 mile radius of Seymour. Like most Indianans, the bulk of the Mellencamps' hand-outs come in the form of corn subsidies.

Comments

|4.15.05 @ 2:40PM|#

Uh-huh..

|4.15.05 @ 2:45PM|#

Ouch, Mr. Welch. You dropped the chalupa on him.

I saw the John Stossel special a couple months ago, and he RIPPED on these "family farmers" getting cotton subsidies. He interviewed a couple of them, and when he was done they looked like slack-jawed welfare queens. I imagine anyone watching that who was in favor of farm handouts were farmers like these clowns.

Matt Welch|4.15.05 @ 2:50PM|#

I highly recommend surfing through EWG's website ... "R E Turner" is pretty fun, and "Jimmy Carter" also makes a brief appearance.

|4.15.05 @ 3:27PM|#

So, how do you get these anyway? Could I style the backyard a llama ranch and get some llama subsidies?

|4.15.05 @ 3:32PM|#

Yeah, llamas and alpacas are subsidized under a World War I-era subsidy for wool bearing animals--we raeally need that wool for the doughboys' uniforms when they go 'over there', ya know.

|4.15.05 @ 4:22PM|#

Man, I hate farm subsidies. Is this the price we pay for not having a completely proportional legislature? No city-dweller I know likes them (though many don't realize that federal farm subsidies exist, due to the mass media pretty much ignoring the issue).

|4.15.05 @ 4:31PM|#

Mellencamp is the most politically naive, knee-jerk "populist" rocker since... hmmm... since Springsteen. Or the Dixie Chicks. Or Pearl Jam. Or just about every other one of their pop peers from the past half century who have lapped up liberalism because That's What A Good Artist Is Supposed To Do.

It's irritating, to be sure, but the best antidote is a Rush album and a copy of Fred Goodman's book "The Mansion on the Hill."

|4.15.05 @ 4:56PM|#

now we know which Mellencamp is the stoner

|4.15.05 @ 5:06PM|#

Hey, why is everyone so concerned about the "family farm"?

I mean, who's out here for the "family automaker"?

The Wine Commonsewer|4.15.05 @ 6:03PM|#

I love it. Great stuff Matt.

Made me LOL, made wanna barf, reminded me of Sam Donaldson's mohair subsidies (and isn't St Jimmy Carter's farming family in the same subsidy boat?) but most of all made my tax day.

Steve Smith|4.15.05 @ 6:24PM|#

Technically, the Mellencamp clan would still be considered "small farmers", assuming they didn't own the same plot of land. That $1.29 mill is being split over a period of eight years, so their total haul from the gov'ment is $162k per year, or $13,512 per 'camp per annum. Depending on how much acreage they own, that money might not go very far.

Matt Welch|4.15.05 @ 6:36PM|#

Steve -- That money would sure go far in *my* pocket....

|4.15.05 @ 6:43PM|#

And yet the "conservatives" want to get rid of any estate tax on the ultra-rich claiming that it saves family farmers and the like.
I'm confused.

|4.15.05 @ 6:47PM|#

I paid $3500 for my car. I pay $6000 a year in rent. $13,000 would go a LONG way in my pocket.
Where's my goddamn subsidy. Hell, 6500 would go a long way. I'll split it with you, Matt.

|4.15.05 @ 6:54PM|#

I hate farm subsidies. It's the granddaddy of all pork barrels. Get rid of them. However this example is anecdotal. The big boys, not the Mellencamps are getting the big money. The fact that Mellencamp is spouting off about something he doesn't know a whole lot about is similar to every news jerk spouting off about something he/she is feeling emotional about without proper source. Left/Right - you are all blowing in the wind.

|4.15.05 @ 7:15PM|#

I'll start respecting the human race when humans stop giving a shit what entertainers have to say (more than any other average bloke). How does a lifetime of guitar playing, acting, etc. imbue one with such great wisdom?

The Lonewacko Blog|4.15.05 @ 7:41PM|#

$13,512 per 'camp per annum

They run businesses, so it's not fair to compare that to money that an individual spends. They need to buy seed, fertilizer, water, electricity, buy and repair equipment, etc. etc.

|4.15.05 @ 7:45PM|#

'Wacko,
That better be sarcasm. I have to buy gas, pay rent, buy electricity, get 'cohol to remain sane (if I drink while doing my taxes, is it deductible?), etc. F' those teet-suckling, rugged individualist. Farm subsidies are so French.

|4.15.05 @ 8:29PM|#

One upside of farm subsidies for the non-farmer is that it artificially keeps food prices low. Although arguments can be made that this just increases the margins of the companies that process the raw ag products.

|4.15.05 @ 9:07PM|#

Brad,

I think you're wrong about subsidies. Food prices are kept artificially high because of tarifs and various regulations. At best, subsidies help balance that out, but I'm not convinced. Subsidies tend to make it harder for competition. For example, if an established business receives a subsidy, it can lower its prices when threatened with competition from the non-subsidized. When the competition fails, it can then jack-up prices to increase its profits.

Subsidies are almost always bad for the average Jane or Joe. A perfect case is ADM, the biggest welfare queen of them all. Not only does it receive insane amounts of subsidies, but it also lobbies hard to keep sugar tarifs high so that we're stuck with its corn syrup crap, which is inferior to cane sugar (and beet sugar, as well, IMO). Thus, most products that require sugar are more expensive than they should be. Eliminate subsidies and tarifs. The government should not decide who'll be the winners and losers.

|4.15.05 @ 9:08PM|#

Mo,

What part of "Lonewacko" don't you get? : )

|4.16.05 @ 1:14AM|#

They need to buy seed, fertilizer, water, electricity, buy and repair equipment, etc. etc.

You do realize that farmers receive subsidies to not grow crops, right? How much seed, fertilizer, and water do zero crops require?

Ron Hardin|4.16.05 @ 11:02AM|#

John & Ken (KFI now, KABC then) recommend federal convenience store aid as well. http://rhhardin.home.mindspring.com/johnkencut.farmaid.ram

John Mellencamp is mentioned.

|4.16.05 @ 12:52PM|#

Farm subsidies and our massive military budget are the reason we have Europe-like taxes without Europe-like services. Seriously, once you include state taxes, we've all paid nearly 50% for a large chunk of the population. Cut all that shit.


New Zealand ended their farm subsidies and it worked out fine: (link from reputable news source, eh?)

http://news.bbc.co.uk/1/hi/programmes/from_our_own_correspondent/3747430.stm

|4.16.05 @ 1:04PM|#

Lonewacko-

They run businesses, so it's not fair to compare that to money that an individual spends. They need to buy seed, fertilizer, water, electricity, buy and repair equipment, etc. etc.

That's true. But if the farm is just barely breaking even, $13k per year can be the difference between making enough money to survive and quitting farming for some other line of work. And $13k gets you more in a small town with a lower cost of living.

On the bright side, subsidized farmers might be able to get by without cheap immigrant labor, so they won't be importing as many MEChA sleeper cells. America's only hope for survival is to keep subsidizing those farmers, lest MEChA mount a Reconquista of the Southwest.

Or at least that's what Lonewacko seems to think ;)


Brad-

One upside of farm subsidies for the non-farmer is that it artificially keeps food prices low.

If our agricultural policies were limited to handing out checks to farmers then I might agree. But my understanding is that our agricultural policies go way beyond just cutting checks, and include subsidies for not growing, tariffs, and price controls (e.g. dairy price controls).

I had this argument with joe a while back. He kept insisting that farm subsidies were partly responsible for the obesity epidemic. I kept telling him that I would really like to believe that, because it would mean one more advantage that I can cite when arguing for a free market for food, but the truth is more complicated. For every policy that might artificially lower the price of corn sweeteners, there's at least one more that artificially inflates the price of other sweeteners. In a free market the cost of sweets might not change significantly.

|4.16.05 @ 3:33PM|#

Unfortunately, I had to run and catch a train as I was typing my first post, so I wasn't able to finish my thoughts. I agree with what you guys have said in response to my first post -- it's a bit of a circular game in terms of what effects subsidies have on food prices.

I think one of the earlier posts hit the nail on the head: subsidies ARE so very French. Unfortunately, because so much of Europe (and Canada as well, I believe) have such high subsidies for their producers, in addition to the limitations on free trade from virtually every country, it throws the entire world's commodity markets out of whack. It seems that the rationale to keep subsidies in the U.S. is to allow the U.S. farms to stay in business who might otherwise fail to the unfair conditions they face as compared to the rest of the world.

The ideal answer is to convince the whole world to abandon the subsidies, let natural competitive pressures reward those farms that produce the most efficiently, and let the ag product prices float naturally.

As to what programs are currently in place, I really haven't kept up on it. I do know that there used to be payments to set aside land and not farm it, but I'm not sure if those still exist today. One part that is still around is the CRP (Conservation Reserve Program) that pays farmers to return highly erodable land to grass. This program is the darling of nature and environmental groups, so the purpose of that one is two-fold. I guess the main thrust of my first post is that many of the programs do encourage farmers to produce a crop (or at least seed it) even if the present economics, sans government assistance, tells a person that you will lose money on it. It always keeps farms in business that otherwise would fail. I do think that, on average, these programs have artificially boosted the production of many ag products in this country, which have the effect of artificially lowering prices. Milk prices were mentioned, and although I know next to nothing about that industry, it was my impression that those programs are a simple artificial price setting by a government body as opposed to any kind of government subsidy to a farmer. Anytime a subsidy is paid to a farmer, with the exception of paying them NOT to grow anything, it will likely encourage the production of excessive products and lower prices.

For full disclosure, my parents are farmers/ranchers, but themselves got tired of the notion of being essentially welfare recipients. They said that the portion of their income from government payments got to be embarrasing (although they needed them to not go broke). With the rise in cattle prices, they decided to seed their entire place into grass and get out of farming completely. Now they are in an industry that survives with no government assistance of any kind (at the producer level, anyway), and they feel a lot better about that.

|4.17.05 @ 3:30AM|#

The sugar tariffs don't keep food prices down.

Since they only result in a wealth transfer of about $800 million, in the big picture they're insignificant, but there is a big "externality".

Keeping sugar prices high makes high-fructose corn syrup (HFCS) a cost-effective substitute. If US sugar prices fell to world levels, HFCS would lose all of its market, and the company that makes it, Archer Daniels Midland, would lose a massive cash cow.

Ever wonder how much money ADM gives to both parties?

Now, is there really any workable method to stop politicians from doling out such rents? The whole "muckraking media + informed electorate" model don't seem to be working.

|4.17.05 @ 7:09AM|#

I'm pretty sure (almost completely sure) that we're still paying farmers not to grow stuff. And I know we still have price controls up. So I have no idea whether our overall farm program raises or lowers prices (though it certainly raises prices for certain goods, e.g. sugar, as already pointed out).

On the other hand, there is a decent argument even a fairly radical libertarian could buy for some sort of farm-subsidy program (though nothing like the one we have now), as one of my friends pointed out. One of our major strategic advantages is that we can feed ourselves--if the entire rest of the world stopped exporting food to us, we'd hardly notice. Once again, some things would become more expensive, but it mostly wouldn't be that big a deal. So in a military conflict we can't be held hostage to our food supply. In that sense a limited farm program could be an important part of a defense budget. That's still not a really good reason to pay peopel not to farm, though...and it probably wouldn't require anywhere near what we spend on it now.

|4.17.05 @ 1:43PM|#

On the other hand, there is a decent argument even a fairly radical libertarian could buy for some sort of farm-subsidy program.

Um, no there isn't. :) Jadagul, I don't know if I qualify as a "fairly radical" libertarian - guess it depends on who you ask - but you seriously underestimate libertarians if you think many of us are going to be sympathetic to that argument. Most libertarians, even those much less "radical" than me, are not going to buy it. It is really no different than the argument that we need industrial policy and steel tariffs to make sure we can produce military equipment in a time of war. That argument has always been a convenient cover for protectionism and corporate welfare; any farm policy based on it would be as well.

It makes no more sense to worry about the rest of the world refusing to sell to us than it does to keep a garden in case all the grocers in my city refuse to sell to me. It is simply not going to happen, in a time of war or otherwise. The rest of the world is a big place and they like selling to us as much as my grocer likes selling to me.

|4.17.05 @ 2:00PM|#

"Ever wonder how much money ADM gives to both parties?"

Heh.

Funny how the reddest regions of my state get the most subsidies.

Brad: Why would your family get out of farming ranching on ideological grounds? The govt's money is just as green as the free market's I've known few capitalists who were too embarrassed to take money from any source.

|4.17.05 @ 3:31PM|#

For the record, a citizen of Indiana is a "Hoosier" not an "Indianan."

|4.17.05 @ 5:13PM|#

In that sense a limited farm program could be an important part of a defense budget. That's still not a really good reason to pay peopel not to farm, though...and it probably wouldn't require anywhere near what we spend on it now.

If it was really such a tiny program, and if we could have confidence that it would stay that way, I'd consider tossing libertarian principles aside here. The problem is that in the real world it never works out that way, the program always grows and grows and grows to include things completely unrelated to the original, possibly justifiable purpose.

|4.17.05 @ 5:46PM|#

Yeah...I know. What we have now is a monstrosity, and it's the first item on my list of "Things to cut when I get made dictator." Just pointing out that there is a fairly plausible argument to be made for some sort of farm subsidy...which doesn't even mean that I necessarily buy it.

|4.18.05 @ 9:33AM|#

The numbers don't say enough. This could be very well legitimate. Has anyone priced farm equipment these days?

|4.18.05 @ 10:15AM|#

Neither here nor there, how does one bother to sign up for a farm subsidy and only end up with $420 for the effort, like the tool Andrew Mellencamp on the bottom of the list?

Also, I don't particularly care about Cougar; are any Youngs of the "Neil Young"'s involved in farm subsidies? Any in Ontario don't count. Is there a Model Railroad Company Subsidy I didn't know about? I loathe to joke about Lionel trains, because the whole story of Neil Young's involvement in that company is overall, just downright affirming.

|4.18.05 @ 3:20PM|#

Criticzing someone for taking farm subsidies is pretty much ridiculous. A farmer not taking subsidies on moral grounds would be analogous to a business owner saying, "hey wait, a tax deduction for that seems odd, I think I'll pass on that and just charge my customers more to make up the loss." Being an organic farmer, the only "subsidy" I could get is a break on the cost of organic certification. However, outside of small organic farmers you will rarely, if ever, see a farmer -not- getting some kind of subsidy and usually the level is simply proportional to the size of the operation. Yes, there are those that "farm" the subsidy programs like there are those that "farm" the tax code...should we switch to a flat tax?

Right now you pay one way or the other. You pay for your food through taxes channeled to subsidies. Its called externalized cost and there is an enormous amount in agriculture. So while you're cutting, start including the cost of pollution and exploited workers...that loaf of bread is going to either start costing you or it will be made in a country where they can continue to externalize costs.

Oddly enough, the subsidies not to farm are a new thing, embraced by most people inside the system. Its an incentive-based approach as opposed to a production-based approach. It is meant to curb overproduction. It might sound more appealing if it was described as a program to conserve marginal crop land, protect the environment, and increase profit to farmers...I don't know. However, if you object to that, the Conservation Security Program is in the pilot stage and aims to take CRP beyond anything anyone ever dreamed of. Incentive based...unless you axe subsidies all together...is the way to go. Just some thoughts.

|4.18.05 @ 6:18PM|#

I had this argument with joe a while back. He kept insisting that farm subsidies were partly responsible for the obesity epidemic. I kept telling him that I would really like to believe that, because it would mean one more advantage that I can cite when arguing for a free market for food, but the truth is more complicated. For every policy that might artificially lower the price of corn sweeteners, there's at least one more that artificially inflates the price of other sweeteners. In a free market the cost of sweets might not change significantly.

It really does seem as if there is a duel tendancy: regulate & tax the hell out of an industry, and provide corprate welfare to offset the regulation.

|4.18.05 @ 6:23PM|#

Unfortunately, because so much of Europe (and Canada as well, I believe) have such high subsidies for their producers, in addition to the limitations on free trade from virtually every country, it throws the entire world's commodity markets out of whack. It seems that the rationale to keep subsidies in the U.S. is to allow the U.S. farms to stay in business who might otherwise fail to the unfair conditions they face as compared to the rest of the world.

What's wrong with letting the French subsidize our diet?

|4.18.05 @ 6:38PM|#

Criticzing someone for taking farm subsidies is pretty much ridiculous. A farmer not taking subsidies on moral grounds would be analogous to a business owner saying, "hey wait, a tax deduction for that seems odd, I think I'll pass on that and just charge my customers more to make up the loss."

A tax is when the gov is taking moeny you earned from you; a subsidy is other people's money the gov is giving you. Big diff, if you ask me.

Right now you pay one way or the other.

So, we are giving $$$ to farmers to cut externalized costs? So what you are saying is, we regulate farmers into the ground, and then compensate by giving them money confiscated (taxed) from others?


Oddly enough, the subsidies not to farm are a new thing, embraced by most people inside the system.

IIRC, New Deal program. Wouldn't exactly call it a "new thing".

|4.18.05 @ 8:55PM|#

When you turn down thousands of dollars in subsidies from the government, then you can pontificate about how morally superior you are to those wicked farmers.

Fact is, you'd take every legal cent you could, just like President Bush and Ted Turner and John Mellencamp's cousins. Here's a quarter. Buy a clue.

|4.19.05 @ 11:27AM|#

"if welfare checks is farming, I guess I'd just rather not" - Fred Eaglesmith

I've worked a lot in communities that are based on heavily subsidized crops, cotton and corn. The amazing thing to me was to see a farmer who received tens of thousands of dollars in subsidies, disaster payments, and price supports get on a political/moral highhorse about how the "welfare queens" and "illegals" were causing the budget shortfall.

|4.19.05 @ 2:53PM|#

When you turn down thousands of dollars in subsidies from the government, then you can pontificate about how morally superior you are to those wicked farmers.

The problem isn't that the farmers accept the money; it is that the government offers the money in the first place.

|4.19.05 @ 4:51PM|#

All this makes my head hurt. Being a Libertarian must be very depressing.

My 2 cents: CRP land makes for damn fine pheasant hunting. And I'm not sure where farmers spend their subsidies, but in northeastern Nebraska it isn't on new equipment or new coveralls, as far as I can tell.

|4.19.05 @ 8:18PM|#

Of course, the biggest subsidies (to producer _and_ consumer) are the externalities unpaid for: the spending of 'soil capital' and 'non-renewable energy' capital. Does $0.49 / lb of bananas or $1.50 for a loaf of bread come anyhere near covering the capital cost of producing these things? If the agriculture industry is to be believed, these prices barely cover the easily accounted for day-to-day operating expenses. There is no shortage of popular awareness of depleting energy suplies, but very little awareness that except for (maybe) the terraced hillsides of Bali or very rural China (where they carry their 'nightsoil' out to the fields every morning) agriculture as practised in every OECD country (including 'subsidy free' NZ) is built on a rapidly depleting capital asset.

billy-jay|4.20.05 @ 4:46AM|#

Of course, if a farmer can not run a farm without making a profit, that's the economy telling him he needs to find another line of work.