Farm Subsidies II: The Revenge

A few days ago, news reports began to appear suggesting that members of Congress might be nearing a deal to cut tens of billions in planned spending from farm subsidies. "Agriculture Committee leaders in Congress are closing in on a 10-year savings target near $23 billion," Politico reported last week. "To achieve that level of savings almost certainly means the end of the current system of direct cash payments costing almost $5 billion annually."

But as is so often the case in Washington, the proposed cuts aren't really cuts, at least not if you look at the larger spending picture; instead, they're a form of budgetary sleight of hand, in which Congress makes spending disappear from one program and then hopes no one notices when it reappears later in a different form. From The New York Times

It seems a rare act of civic sacrifice: in the name of deficit reduction, lawmakers from both parties are calling for the end of a longstanding agricultural subsidy that puts about $5 billion a year in the pockets of their farmer constituents. Even major farm groups are accepting the move, saying that with farmers poised to reap bumper profits, they must do their part.

But in the same breath, the lawmakers and their farm lobby allies are seeking to send most of that money — under a new name — straight back to the same farmers, with most of the benefits going to large farms that grow commodity crops like corn, soybeans, wheat and cotton. In essence, lawmakers would replace one subsidy with a new one.

In fact, according to Montana State University agricultural economist Vincent Smith, the new subsidy structure may not save any money at all, and could end up costing taxpayers more than the current system. He explains over at the American Enterprise Institute's blog:

To get the ag lobby’s support, the deal would include passing a new “improved” farm safety net that is a variant of a current ACRE program. This bait and switch will keep subsidies flowing to already wealthy farmers and could cost taxpayers billions more in the long run.

So what is the “improvement”? It is a modification of the ACRE program that pays farmers a subsidy when the revenue per acre for a particular crop falls below recent statewide historical averages. Since crop prices are at, or near, all-time record highs, that means taxpayers would pay already wealthy farmers to maintain record profits—at a time when millions of Americans are jobless and not making a profit at all.

...This deal could end up costing taxpayers more money in the long run, too. If prices go down, even partially, towards more typical levels, taxpayers may be on the hook for much more than $6 billion in some years and, depending on the final structure of the program, could average as much as $5 billion annually. Add it up—over ten years, there would be no cuts from ag subsidies at all, just a switch in how they are received.

Remember: the $5 billion a year in direct payments that now form a "cornerstone of American farm subsidies," according to The Wall Street Journal, were originally intended to be temporary. 

Read A. Barton Hinkle on ending farm welfare as we know it

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  • Live Free or Diet||

    Alpaca wool is the same way. I love the stuff, but I still don't want the government paying for it.

  • ADM||

    But without the farm subsidies, there won't be enough food and people will be DYING IN THE STREETS!!!11!!1

  • mad libertarian guy||

    They just can't help but spend can they?

    Addicted ass motherfuckers who just don't fucking get it.


  • John Tagliaferro||

    Farm subsidies, the perfect nexus of Socialism and manufactured victimhood.

  • o2||

    cut team reddz farm subsidises?

    teh [HORRORZ] !11!!1!!!1

  • ||

    Try looking at the roll call votes for the farm bill sometimes, o2. Farm subsidies are bipartisan, but they're definitely more popular among TEAM BLUE politicians.

  • ||

    I would change the headline for this post from "Farm Subsidies II: The Revenge" to "Farm Subsidies II: The Wrath of Con."

  • ||

    How about the "Wrath of Cron"

  • ||

    Or the Wrath of Corn. The critical issue is "wrath" and something that sounds like "Khan." Wrath of ConAgra.

  • James Tiberius Kirk||

    CORN!!! CORN!!!

  • ||

    Yeah, i get it, which is why i called it cron instead of corn, equivalent to pron and porn.

    Hate you

  • ||

    Ah, I see. Corn is the porn of the grain world--I agree.

  • ||

    taxpayers would pay already wealthy farmers to maintain record profits

    But WILLIE! says the farmers are all starving. They're all dressed in rags, huddled in their frigid sod shanties, waiting for the sheriff (pawn of evil moneybags bankers!) to hurl them into a snowbank.

  • Brett L||

    I don't understand. He smokes enough dope for just about every farmer in the US to put in a side crop and make out fine.

  • ||

    I'm curious - if the program is $5BB a year, wouldn't it be (at least) $50BB over 10 years? So how would cutting $23BB over 10 years mean "the end of the current system of direct cash payments"?

  • ||

    Well its actually more expensive, so their lack of math skills seems irrelevant.

  • ||

    Forget it, Jake. It's Chinatown Iowa.

  • PR||

    back when they published the subsidy payments, I couldn't believe how many farmers lived in Highland Park in Dallas. Of course getting a fat check from Uncle Sam does make Highland Park more affordable.

  • ||

    its landowner subsidies rather than farmer subsidies.

  • Tony||

    With all these government handouts it's a mystery why farmers haven't become completely unproductive and we're not all starving. I wonder why the libertarian psychoanalysis of welfare recipients doesn't apply to them.

  • o2||

    now just slow down tony. this wingnutz psychobabble doesnt apply to teh [CORPORATIONZ] welfare either.

  • ||

    Too bad that your TEAM supports ag subsidies the most, o2.

  • cynical||

    I don't think it's the labor side of farming that's getting the handouts in a lot of cases.

  • ||

    So, Tony, I take it you missed the part about "crop prices are at, or near, all-time record highs?"

    Though I guess you find corn ethanol to be a productive use of corn.

  • jtuf||

    Tony, welfare recipients get paid to not work, while farmers get paid to be farmers. You get what you pay for.

    Farm subsidies cause people who aren't competent enough to survive as farmers on the free market to stay farmers instead of selling their land.

  • ||

    crop prices are at, or near, all-time record highs

    No kidding. My friends who are bird hunters are moaning about farmers taking land out of the Conservation Reserve Program and planting stuff like lentils, just so they can make more money. The greedy bastards!

  • ||

    I just want to know why the astronaut needs a space helmet, but the horse doesn't

  • ||

    Silicone Space horses that breath super-cooled hydrogen.. duh!

  • jtuf||

    The horse and farmer are on Earth. The farmer is just wear the new OSHA mandated uniform.

  • stock crusher||

    So, Tony, I take it you missed the part about "crop prices are at, or near, all-time record highs?"

    Though I guess you find corn ethanol to be a productive use of corn.


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