Agricultural Subsidies: Corporate Welfare for Farmers

"The government is bailing out the banks...but who's going to bail out the government?" asks Texas cotton farmer Ken Gallaway, a vocal critic of agricultural subsidies that cost U.S. taxpayers and consumers billions of dollars a year in direct payments and higher prices for farm goods.

Agricultural subsidies were put in place in the 1930s during the Great Depression, when 25 percent of Americans lived on farms. At the time, Secretary of Agriculture Henry Wallace called them "a temporary solution to deal with an emergency." Those programs are still in place today, even though less than 1 percent of Americans currently live on farms that are larger, more efficient, and more productive than ever before.

Consider these facts. Ninety percent of all subsidies go to just five crops: corn, rice, cotton, wheat, and soybeans. Two thirds of all farm products—including perishable fruits and vegetables—receive almost no subsidies. And just 10 percent of recipients receive 75 percent of all subsidies. A program intended to be a “temporary solution” has become one of our government’s most glaring examples of corporate welfare. 

U.S. taxpayers aren’t the only ones who pay the price. Cotton subsidies, for example, encourage overproduction which lowers the world price of cotton. That’s great for people who buy cotton, but it’s disastrous for already impoverished cotton farmers in places such as West Africa.

U.S. farm programs cost taxpayers billions each year, significantly raise the price of commodities such as sugar (which is protected from competition from other producers in other countries), undermine world trade agreements, and contribute to the suffering of poor farmers around the world. It’s bad public policy, especially in these troubled economic times.

"Agricultural Subsidies: Corporate Welfare for Farmers" is hosted by Reason.tv's Nick Gillespie and is approximately 8.30 minutes long. The producer-writer is Paul Feine and the producer-editor is Roger Richards.

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  • ||

    Fantastic job! Reason.TV is ready for prime time!

  • some stupid American guy||

    "Corporate"? These guys wear overalls, not pinstripes. You know, mom 'n' pop, with chickens in the yard. A couple of half-wit farmhands. A hot daughter. You want to throw them out in the street?

  • Gilbert Martin||

    You can bet that ending this boondogle is NOT a "change" that Obama will believe in.

  • </||

    Two thirds of all farm products-including perishable fruits and vegetables-receive almost no subsidies.

    Who'll think of the perishable fruits and vegetables?

    And their often reluctant consumers....the CHILDREN?

  • ||

    Ninety percent of all subsidies go to just five crops: corn, rice, cotton, wheat, and soybeans. Two thirds of all farm products-including perishable fruits and vegetables-receive almost no subsidies.



    Actually there has long been a conspiracy theory popular with populists of both the left and right that this is due to the fact that the favored five crops are capital intensive, requiring extensive mechanization and large land holdings while fruits and vegetables were not.

    In this worldview, it was not the farmers who pushed for subsidies but those evil northeastern bankers wanting to protect the loans to the big cash crop farmers.

    Of course now vegetable farming is becoming more and more mechanized and capitalized (irrigation etc) so I'm not hearing that one as much any more.

  • ||

    Government wasting money on a counter-productive boondoggle? Stop the presses! That's never happened before!

    -jcr

  • ||

    I've read that if we cut out cash crop subsidies, the net effect of purchasing those crops abroad would completely obviate the need for foreign aid.

  • MNG||

    "At the time, Secretary of Agriculture Henry Wallace called them "a temporary solution to deal with an emergency." Those programs are still in place today"

    This is the problem with a lot of government benefits programs, you create a constituency for these things that will get passionately organized to keep getting the benefit since it means so much to them while, since the costs are spread out among the rest of us, the general public cares much less about it, and the program gets stuck in forever.

  • ||

    U.S. farm programs ... contribute to the suffering of poor farmers around the world.

    This is the under-reported angle of the story, along with the basic immorality of paying farmers not to grow food while people around the world literally starve to death.

  • MNG||

    I dunno FrBunny, would the people that are starving be able to buy the crops if the farmers grew them? Or would it be able to get to them if they could (I've heard that people that are starving in many countries are not so because of a lack of food but the screwy governments don't let the food get to the people)?

  • ||

    Dont you just love seeing our dolalrs at work!

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  • ||

    MNG

    That's absolutely a consideration, but it's no reason to actively exacerbate the problem. There are people who will starve no matter what we do, but others are victims of market manipulation, and part of that responsibility rests on US farm programs.

    I'm not even advocating aid, just that we stop preventing food from getting to market.

  • robc||

    MNG,

    I assume some of the people starving are those who cant afford to grow food because of our subsidies. It seems like they could grow enough for themselves, but maybe they need to be able to sell off extra to even be able to afford to grow for themselves.

  • MNG||

    robc
    Good point.

  • T||

    (I've heard that people that are starving in many countries are not so because of a lack of food but the screwy governments don't let the food get to the people)

    There's two different issues. One is chronic malnutrition and the other is outright famine. Chronic malnutrition results in part because subsistence farming is a bitch, and where there's no real market for your produce, you're trapped in a cycle that's hard to get out of. Famine, in this day and age, always results from some government deciding some subset of the population doesn't need to eat. It's genocide without getting your hands dirty.

    Ag subsidies are a great way to keep the third world poor and dependent. Besides, don't ADM and Cargill deserve more money?

  • Citizen Nothing||

    Jesus. MNG is making some good points. I must be on Bizarro Web.

    Speaking of which, I heard Jonas Goldberg on the BBC this morning pimping his book "Liberal Fascism." He sounded reasonable. I must be going insane.

  • Jeff P||

    Significantly raise the price of sugar?
    It's already dirt cheap. The big sacks cost under two bucks. There's piles of it untended at Dunkin' Donuts.

  • Basement dweller||

    There was a good segment on 20/20 about this a while ago, too.

  • Seward||

    I'd add that the farming policies of the Roosevelt administration were primarily meant to promote economic equality and not as a means to quickly get farming profitable again. That's much of the reason why price controls were tried, they slaughtered millions of livestock, etc.

  • ||

    Jeff P,

    but a lot of the world lives on a dollar a day - which is why paying a few pennies more for sugar doesn't mean anything to you, but a lot to the guy in the third world who has to compete against subsidized farmers here.

  • Gilbert Martin||

    "Significantly raise the price of sugar?
    It's already dirt cheap. The big sacks cost under two bucks. There's piles of it untended at Dunkin' Donuts."

    Dirt cheap?

    Tell that to the Coca Cola company (and Pepsi).
    They switched to corn syrup sweetners long ago because sugar cost too much.

  • Gilbert Martin||

    "I'd add that the farming policies of the Roosevelt administration were primarily meant to promote economic equality and not as a means to quickly get farming profitable again. That's much of the reason why price controls were tried, they slaughtered millions of livestock, etc."

    Yes it's always a good idea to keep people equally broke while their starving to death.

  • ||

    Actually there has long been a conspiracy theory popular with populists of both the left and right that this is due to the fact that the favored five crops are capital intensive, requiring extensive mechanization and large land holdings while fruits and vegetables were not.

    In this worldview, it was not the farmers who pushed for subsidies but those evil northeastern bankers wanting to protect the loans to the big cash crop farmers.


    Don't forget our good friends at places like Deere and Caterpillar.

  • Old Bull Lee||

    Was anybody else a little taken aback at seeing Obama pandering to farmers all the way back in 2005?

  • ||

    They grow a lot of (subsidized) corn in Illinois.

  • BakedPenguin||

    They grow a lot of (subsidized) corn in Illinois.

    It's America's corn hole!

  • BakedPenguin||

    I apologize for that. But it had to be said.

  • Old Bull Lee||

    "They grow a lot of (subsidized) corn in Illinois."

    So they don't grow much at all?

    Sorry, somebody had to get that one in there eventually.

    I didn't realize Farm Aid was in Illinois, which makes it look a little less like Obama planting the seeds for his presidential campaign (I'm here all week!).

  • ||

    Never apologize, never explain.

    -------

    I assume some of the people starving are those who cant afford to grow food because of our subsidies.

    We also should recognize that food "aid" which floods a country with free food makes it pretty much impossible for local farmers to make a living. Before long, they are waiting in line for the beneficence of some NGO, with everybody else.

  • ||

    Robert Mugabe shoulod be used as fertilizer.

  • ||

    pay no heed to the extraneous "o".

    stupid keyboard

  • economist||

    I've noticed a pattern over the years. A hideously expensive and inefficient farm bill gets proposed. Proponents say it's not perfect but it's necessary to prevent disaster "for the time being", so it gets passed. Then the process is repeated five years or less later.

  • Giblet||

    As long as the government is providing welfare to ghetto women, I see nothing wrong with it also providing welfare to corporate farms, which at the very least, produce something more valuable than bastards.

  • Gilbert Martin||

    That government phenomenon is hardly limited to the farming arena.

    How long was that federal phone tax in effect that was supposed to pay for the Spanish-American war?

  • economist||

    Giblet,
    You're being an asshole.

    That said, to hell with social welfare programs, too.

    But I think we might actually have some luck getting farm subsidies repealed...What am I saying? Never mind. Neither one will ever get repealed. Onward to the statist paradise!

  • DBA||

    Without subsidies, the farmland would be devoloped, leaving the US vulnerable under certain scenarios.

  • ||

    We also should recognize that food "aid" which floods a country...

    You made no accusation, but I feel the need to reiterate the difference between "sending aid" and "fisting the free market without lube".

    Paying farmers not to grow food while others starve is immoral IMO. Deciding not to send charity is not.

  • Giblet||

    "What am I saying? Never mind. Neither one will ever get repealed. Onward to the statist paradise!"

    My point exactly.

  • Ben||

    I think it's outrageous that we subsidize cotton while hemp is illegal. I'm sure the cotton industry would love for us to make it legal.

  • ||

    How long was that federal phone tax in effect that was supposed to pay for the Spanish-American war?

    About nine decades.

  • ||

    Of course now vegetable farming is becoming more and more mechanized and capitalized (irrigation etc) so I'm not hearing that one as much any more.



    You're also hearing that one less because in the last farm bill, when it looked like Democrats representing organic/vegetable/specialty farmers and the urban poor would team up with the anti-ag subsidy Republicans and cause real farm bill reform, the big ag subsidy congressmen like Rep. Peterson (D-MN) threw some pittances towards food for the urban poor and towards specialty crops to buy them off and have a new largest farm bill in history.

    Completed rolled the reform effort, which previously looked like it might have gotten a majority; couldn't even sustain a Bush veto.

    Of course, we know that that issue wasn't one of the absolute top issues for Reason writers and supporters. (If it was, then more would have voted McCain.) The people who want more farm subsidies are not only more numerous in general it seems (even people who don't get them support them), but far more passionate.

  • Vines & Cattle||

    The subsidies are meant to keep farmers feeding the corporate/bureacratic beast, and not bypass the system. There are all sorts of regulatory hurdles that prevent people who grow food from actually selling the food themselves.

    I could grow a beef, slaughter it and feed to my daughter.

    I could feed it to you and yours if you came over.

    But if you offered me cash for that beef, and I accepted?

    I'd go to jail for selling unsafe meat.

    When did that meat become unsafe?


    Read this.

  • GILMORE||

    FrBunny | January 27, 2009, 9:22am | #

    U.S. farm programs ... contribute to the suffering of poor farmers around the world.

    This is the under-reported angle of the story, along with the basic immorality of paying farmers not to grow food while people around the world literally starve to death.


    There was a NYT editorial from Mali pointing out the problems with subsidies a few years ago

    here =

    http://www.nytimes.com/2003/07/11/opinion/11CAMP.html?ex=1233205200&en=a0f2d20802bf6bfe&ei=5070

    god, i'd forgotten the title.

    "Your Farm Subsidies Are Strangling Us"

    Response? none

  • Freeranger||

    I'm sure many of you know this but here we go again. Farmers are not the beneficiaries of subsidies. The check is written to them but the subsidies are simply capitalized into higher land costs. So the real beneficiaries are land owners. Secondary beneficiaries are vendors of production inputs (seed, pesticides, fertilizers, etc.).

    But aren't farmers landowners? Yes, but most land is farmed by renters. In Iowa, the nation's leading corn and soybean state, about 2/3 of the land is farmed by renters, and rental costs go up directly with farm subsidies.

    As a farmer myself who rents about 85% of the land I farm, I'd be in favor of eliminating farm subsidies and so would many of my colleagues.

  • ||

    I live in northern calif in the sacramento valley.The main crop is rice and the majority of these farmers are republicans. I've heard them all complain about welfare. People who need help to make it on their own! the rice farmers around here don't look like they need that much help but they still expect there fair share of welfare!They want us to believe that they are the mainstay of the community but only employ a very small amount of help ,often temporary.And at least in our area they end up as the so called leaders of our county /these are the people who end up as our supervisers and control the other aspects of growth. denying large corp. that wanted thru the years to come here and make use of cheap labor.stop the subsidies now. They are known to work only 2 months of the year . It seems like if things were that tight they would find part time work

  • mbt||

    hi,
    everybody, take your time and a little bit.rtyer

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