Food Prices Up. Farm Bill... Also Up?

Katherine Mangu-Ward | April 29, 2008

Congress to self: "Hmmm... food prices are way up. People are freaking out about it. What's the best approach here? Think, Congress. Think!"

"Ah ha! $300 billion in price support and other farm subsidies!"

<Congress pats self on back> 

***

Oh well, I guess we should be grateful for the little things:

The proposed bill would ratchet down payments to wealthy individuals not directly involved in farming, perhaps setting a cap that would cut off benefits for those earning above $500,000 in nonfarm income.

More farm fun here.

Comments

TallDave|4.29.08 @ 12:48PM|#

It's pretty crazy we're still subsidizing what is now the strongest sector of the economy.

ed|4.29.08 @ 12:52PM|#

In their sties with all their backing
They don't care what goes on around.
In their eyes there's something lacking
What they need's a damn good whacking.

Mad Max|4.29.08 @ 1:01PM|#

If Congress keeps on in this way, the public will come to think of "farm" as "that four-letter word beginning with 'f.'"

|4.29.08 @ 1:02PM|#

Why did the amount drop so significantly since 2005?

Were some of the corn subsidies shifted out of the "Farm Bill" into a biofuels program run through a different department?

robc|4.29.08 @ 1:08PM|#

What joe asked.

Suggesting a 2nd answer (although his sounded reasonable), end of the tabacco buyout?

|4.29.08 @ 1:10PM|#

The chart on the bottom indicates that farmers recieved between 10 and 15 billion in subsidies in 2008. Yet the total farm bill is 300 billion. The article says that 10 billion of that is for food stamps which shouldn't even be in the farm bill. Where is the other 265 billion going? That seems to be a bigger concern than the few billion actually going to farmers.

|4.29.08 @ 1:13PM|#

John,

The $300 billion is over five years, while the chart is annual payments.

|4.29.08 @ 1:13PM|#

Of course, the tobacco buyout.

|4.29.08 @ 1:19PM|#

Good catch Joe. But even still, the payments to farmers and food stamps combined only give you around $25 billion a year or $125 billion over five years. I doubt the payments are scheduled to more than double over that time. Even with the no doubt programed increases, that is still no where near $300 billion. There is clearly a heck a lot of other junk thrown in this bill doing good knows what.

Naga Sadow|4.29.08 @ 1:24PM|#

Dammit! I KNEW I should have bought Monsanto stock!

robc|4.29.08 @ 1:25PM|#

joe,

Neither of our answers really explains the big jump from 04 to 05.

Naga Sadow|4.29.08 @ 1:25PM|#

Ayn Rand be damned! I want to start a farm and rent seek! I need investors. Anyone want in?

|4.29.08 @ 1:32PM|#

robc,

Actually, yours does nicely. It would make sense for some subset of tobbacco farmers to keep growing right up until the last minute, and then take their payments the year the program was set to expire.

robc|4.29.08 @ 1:42PM|#

joe,

This may have been from the state, not the feds, but my grandmother (she had tobacco "base") got payments over a series of years, not a lump sum.

But, who knows, I may have been right.

Guy Montag|4.29.08 @ 1:55PM|#

Leave the Tabasco subsidy alone!

In other news, I used to hear the saying "if we don't subsidize the farmers we won't have any more food" from all sorts of college students. Some from the middle-east, some from europe, some from manhattan, that exact phrase somehow covered a lot of ground, no matter what language a Leftist spoke.

Geotpf|4.29.08 @ 2:02PM|#

Guy Montag-I've heard right-wing, pro-military, gun-owning Republicans make similar arguments in favor of farm subsidies. I was confused.

Guy Montag|4.29.08 @ 2:11PM|#

Geotpf,

Guy Montag-I've heard right-wing, pro-military, gun-owning Republicans make similar arguments in favor of farm subsidies. I was confused.

Yea, I have heard a few of those too, usually the variety who call for a Windfall Profits Tax on oil companies, want to take profits from the drug companies and force television stations to interrupt their broadcast schedule any time a sitting president wants to be on television. In my experience, those RINOS are far outnumbered by the admitted Leftists.

robc|4.29.08 @ 2:42PM|#

Been trying to find some numbers to explain the graph.

1. The tobacco boyout began in 2005, but is spread over 10 years.

2. The corn subsidy #s by year
2004: 4.5B
2005: 9.4B
2006: 4.9B

Something happened in 2005. Probably a 2004 election year farm bill.

chad|4.29.08 @ 2:44PM|#

Regarding where the rest of the money is going.

According to a Congressional Research Service report (www.nationalaglawcenter.org/assets/crs/RS22694.pdf), the cost of the major provisions of the Farm Bill from FY02-FY07 was $270.2 billion. $178.2 bil for the food stamp program and $92.1 bil for the three major farm support programs (commodity support, conservation, and trade).

The discrepancy from year to year in farm commodity programs ($8B in FY04, $14B in FY05, $17B in FY06, and $8B in FY07) is most likely due to the counter-cyclical and LDP programs which, unlike the direct payment program, actually take some direction from the market price of commodities so that when prices are low farmers get more support and when prices are higher farmers get less support (relatively speaking). Grain prices decreased after FY04 so that FY05 and FY06 were lower, then prices rose again in FY07 - which may explain the different farm support payments from year to year.

robc|4.29.08 @ 2:45PM|#

Disaster programs were also way up in 2005:

2004: 547M
2005: 3.0B
2006: 166M

robc|4.29.08 @ 2:46PM|#

BTW, 2005 doesnt look out of place if you go back in time. 2004 looks out of place. 2005 looks a lot like 2000-2003.

robc|4.29.08 @ 2:47PM|#

ummm... 1999-2001

here's a link:

http://farm.ewg.org/farm/progdetail.php?fips=00000&progcode=total

chad|4.29.08 @ 3:02PM|#

The EWG subsidies by year correlate closely to grain prices. When prices are high, payments are low - and when prices are low, payments are high. See historical corn prices (www.mrci.com/pdf/c.pdf) and compare to EWG graph.

Paul|4.29.08 @ 3:42PM|#

perhaps setting a cap that would cut off benefits for those earning above $500,000 in nonfarm income.

Ooooh, yippeee! Another discussion about "working class" folks.

|4.29.08 @ 3:44PM|#

BTW, 2005 doesnt look out of place if you go back in time. 2004 looks out of place. 2005 looks a lot like 2000-2003.

Maybe 2004 was the year the Great Phase-out of Farm Subsidies really started to bite, so the nancies in Washington immediately reversed it?

Paul|4.29.08 @ 3:45PM|#

Yea, I have heard a few of those too, usually the variety who call for a Windfall Profits Tax on oil companies,

That's because they're the most pissed off about gas prices. When your RAM3500000 with the turbo-diesel, 450 valve, DOHC supercharged diddlebomber gets 7 miles per gallon, that near $4 price gets mighty 'spensive.

Gas at the 7-11 at the bottom of my hill this A.M.: $3.97

w00t!

robc|4.29.08 @ 4:17PM|#

Gas was back under 3.60 when I filled up this morning.

Guy Montag|4.29.08 @ 4:27PM|#

That's because they're the most pissed off about gas prices. When your RAM3500000 with the turbo-diesel, 450 valve, DOHC supercharged diddlebomber gets 7 miles per gallon, that near $4 price gets mighty 'spensive.

I tell those folks "if you can't afford the fuel, you can't afford the vehicle".

However, it is usually one of those do-gooders trying to tell me that I don't 'need' a '72 V-8 car and a Jeep.

Paul|4.29.08 @ 7:04PM|#

Gas was back under 3.60 when I filled up this morning.

Where do you live?!!

|4.29.08 @ 8:29PM|#

I'm against farm subsidies myself. But still, the question begs to be asked, would any of you want to be farmers? (Assuming you're not a farmer already, that is)