Farm Subsidies

Farm Subsidies: The Temporary Program That Just. Won't. Die.


credit: ISD 191 Performing Arts Programs / / CC BY-NC

If you want an idea of how hard it is to kill a government program, take a look at farm subsidies. In theory, the $5 billion in direct payments made to farmers each year are supposed to ease the burden on small farmers. In practice, the program ends up paying a chunk of that money to wealthy urbanites and others who are not exactly hard working small farmers. 

This weekend The Washington Post told the story of Lisa Sippel, who lives in a grand apartment building on Central Park West in Manhattan—and still got more than $9,000 in farm subsidies last year. The program doesn't just pay rich New Yorkers. It also pays congressional representatives, including folks like Rep. Stephen Fincher (R-Tenn.), who got more than 70 grand last year. (To his credit, he's called for the program to be shut down.)

This is a program that doesn't meet basic tests of public worthiness: The Government Accountability Office last year concluded that the program failed to align with the good-government principles of relevance, targeting, affordability, effectiveness, or oversight. The GAO report frames its conclusion politely: Continuing to make payments that don't "align with principles significant to integrity, effectiveness, and efficiency in farm bill programs raises questions about the purpose and need for direct payments." The question I think it raises the most is: Why the hell are we still spending this money?

I say "still," because here's the story's kicker: This was a program that supposed to be temporary. Indeed, it was a program that was supposed to save the government money by ending farm subsidies a decade ago. Instead, it's cost taxpayers some $46 billion more than it was supposed to.

And, at least for now, it's still going. The Post tells the tale:

It has become a case study in how a temporary giveaway turns permanent, but it began in 1996 as an idea to save the government money.

Warner Bros.

A penny-pinching Republican Congress wanted to eliminate the complex system of subsidy payments that had begun in the New Deal, but it didn't want to make farmers quit cold turkey.

So Congress devised a kind of nicotine patch for farm subsidies. The new program would pay out smaller and smaller amounts over seven years. Then it would end.

To make the changes more palatable to farmers, Congress loosened the requirements for getting the payments. They would be calculated based on a farmer's past harvests. In the future, farmers could grow the same crops. Or different ones.

Or no crops at all. The money would still come.

"These are not welfare payments. These are declining market transition payments," said then-Rep. Pat Roberts (R-Kan.), the architect of the plan. When those payments finally ended, Roberts promised, Congress would have finally gotten "the dead hand of government out of the business of farming."

Roberts' seven-year plan held up. For about two years.

Then, in 1998, farm income fell. A drought crippled harvests. The farm lobby howled for help. Congress complied by adding $2.9 billion in extra payments. The declining transition payments would no longer decline before their end date.

In 2002, Congress got rid of the end date, too.

The obvious lesson here is that it's really hard to truly kill any government program—even the kind that's not effective, and even the kind that's designed to die. And because of that, we ought to be extremely cautious before starting up any new programs, especially the kind that, like farm subsidies, create entrenched constituencies through payouts and other benefits. Even supposedly temporary programs can end up staying with us for a very long time.

NEXT: Cyborgian Immortality by 2045

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  1. I thought the purpose of farm subsidies was to pay farmers not to farm so as to lower supply and raise prices. Because, as we all know, nothing creates wealth like artificial scarcity.

    1. “If we didn’t pay farmers not to farm prices would drop so low it wouldn’t be worth it for farmers to farm.”

      1. Which suggests that farmers are such mindless automatons and yokels that they wouldn’t plant something more valuable, or hold their own goods back until the price rose.

      2. And then the farmers would stop farming. We have to pay them to not farm so they won’t stop farming.

    2. That’s what all the marketing boards are for – you know, all the non-commodity food farmers who don’t get subsidies but merely a government-enforced monopoly on controlling the market. It’s completely different.

  2. Damn. The WaPo found a government program it doesn’t like. So maybe we CAN cut spending and not face the apocalypse.

    1. How long will it be before statists dismiss The Washington Post as having a libertarian bias?

      1. +1

    2. It’s only because they found out that “rich” people were benefiting from it. I’m sure they would be all about this program if it actually helped only small farmers.

      1. +1 Pigford payment

      2. I’m sure it didn’t hurt that farms are out in the country — “red” states & counties.

    3. Wait until the 2014 primaries. Get back to me when they’re pounding Dem frontrunners in Ag districts for being pro-subsidy. Oh wait…

  3. Beef prices are at an all-time high:…..d-to-rise/

    I am sure that beef producers will want to apply some of that money to repaying the subsidies they got when prices were low.

    Oh, there was a drought? Forget I said anything.

  4. failed to align with the good-government principles of relevance, targeting, affordability, effectiveness, or oversight.

    Narrowly avoided a coffee spit-take while reading this.

  5. OT (but reported in Reason newsfeed), Lautenberg died today. Whatever you thought of him, be careful before you read this eulogy. Hagiography would be an understatement:…..vant-know/

    1. He was the last WWII veteran to serve in the Senate, so props to him for that.

      1. No argument with that. But, again, the eulogy…

        1. Ridiculously over the top, particularly with the claim that he saved millions of lives by fighting against smoking and drunk driving.

      2. Why props? Why the deferral to veterans? I don’t get it.

        1. If not for our armed forces we’d be overrun by Mongols, or something.

        2. Why the deferral to veterans?

          Because there is nothing more noble and honorable than committing homicide for politicians! Duh!

    2. Christy Kream has a telling decision to make.

      Appoint a sane interim like Christie Todd Whitman or a goofy wingnut to placate the base for a 2016 run.

      1. Christy Kream

        Is this original? It is the best thing you’ve ever said.

        1. I agree, that’s fucking hilarious. No way I am googling that to find out, though.

          1. If it hasn’t already I predict it will shortly be Santorum’d, to the dismay of everyone.

        2. Christy Kream

          What David Koresh called blowing a load?

    3. I’ll let you take that bullet. It’s amazing that despite such great, great statements who inhabit our government, we’re in such a clusterfuck. Funny, that/

    4. my role model,

      This alone should be sufficient evidence for an indictment.

    5. Julie Roginsky is a Fox News contributor and political and media consultant. She has served as a senior political strategist for Senator Frank Lautenberg…

      Gosh, what a spontaneous, untainted outpouring of affection.

      1. Where’s her next paycheck coming from?

        1. Please, with toadying like that, she’ll never want for work in the political arena. Pols love a column like that more than a blowjob.

          1. You’re right; she’ll be on a new PR staff by this evening.

    6. *barf*

      *Apologies to barfman.

  6. “the greatest public servant I know”
    My next question is how many people does she know?

    1. Can I nominate Rockefeller for that title?

    2. In her defense, this is New Jersey we’re talking about. The only public servants they know are probably politicians from New Jersey. Lautenberg could honestly be in the running for “best of NJ”.

      1. …”in the running for “best of NJ”.”
        And second prize is TWO CA politicos!

      2. Lautenberg could honestly be in the running for “best of NJ”.

        Tallest midget.

  7. I should’ve been a farmer. Since the day I was born, I should have been a farmer. I love chickens and pigs and ducks. I’m kind of fond of nanny goats, I am.

    1. People don’t start playing ball at your age, they retire!

      1. I especially liked Evil Darren McGavin.

    2. Lenny, what did I tell you about petting the rabbits?

    3. “You see those ships over there? I built those. But do they call me a ship builder?”

      1. Hey! Bill Chimpfucker!

  8. The Agriculture Department says it is possible for these urban recipients to turn down these payments.

    Why would they even say that? That has to be the worst excuse ever.

    1. Precisely. Even if the current crop of sucklers demurred, another bunch would shoulder them aside for their turn at the teat. Hate them if you wish, but it’s absurd to lay the blame for such wanton waste at their feet alone.

  9. Probably the reason one must approach the Ryan Medicare plan and similar initiatives with some caution.

  10. Because it’s obligatory:

    Major Major’s father was a sober God-fearing man whose idea of a good joke was to lie about his age. he was a long-limbed farmer, a God-fearing, freedom-loving, law-abiding rugged individualist who held that federal aid to anyone but farmers was creeping socialism. He advocated thrift and hard work and disapproved of loose women who turned him down. His specialty was alfalfa, and he made a good thing out of not growing any. The government paid him well for every bushel of alfalfa he did not grow. The more alfalfa he did not grow, the more money the government gave him, and he spent every penny he didn’t earn on new land to increase the amount of alfalfa he did not produce. Major Major’s father worked without rest at not growing alfalfa. On long winter evenings he remained indoors and did not mend harness, and he sprang out of bed at the crack of noon every day just to make certain that the chores would not be done. He invested in land wisely and soon was not growing more alfalfa than any other man in the county.

    Save the bombardier!

    1. Good quote. I’ll have to remember it.

      Pedant mode:
      Heller made one small error there:

      Alfalfa is a leaf crop not a grain crop and is therefore measured in bales, not bushels.

    2. Every time I hear about farm subsidies, it reminds me of this passage.

  11. Musical Trivia:

    In the film Oklahoma, while the citizens are debating the pros and cons of becoming a state, the American flag on the wall of the room has 48 stars.

    1. Yet another reason that movie versions of musicals are inferior to the original productions. With a few exceptions (Chicago and maybe Nine, for example).

  12. Lisa: Grandpa, that flag only has 49 stars.

    Grandpa: I’ll be long in the cold, cold ground before I recognize Missourah.

  13. Has any country besides maybe New Zealand, gotten rid of even a major portion of their agricultural subsidies? Does any country of any significance not have them?

    1. Too true.

      In Canada, we have “marketing boards” that restrict the supply of almost all produce.

      Milk prices in Canada are more than double milk prices in the USA and discount sales are strictly forbidden.

      I just googled to check. Albertson’s is selling milk at $2.50 per gallon while I pay C$2.08 per liter for 2% here in Canada.

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