The Great Farm-Bill Ripoff
Why are Rockefellers and rock stars receiving government aid?
Anyone starting from scratch would not design a farm policy like the one America has. At least not anyone with a lick of common sense. But since common sense is as common on Capitol Hill as a unicorn stampede, we have:
A confusing clutter of programs that pay farmers not to farm, reward them for undue risk, write checks to rock stars and Rockefellers, give special treatment to certain crops without rationale, and ladle out welfare to the wealthy while ignoring those on the margins.
Congress is now reconsidering farm policy, as it does every five years. If you visit Washington and happen to see a lot of lawmakers wearing slings, that's because they've been breaking their arms patting themselves on the back for "reforming" farm aid. Some of those changes do represent modest improvements. But Congress could do more – a lot more.
On the plus side, legislators are preparing to scrap direct payments. Those are straight transfers of taxpayer money from the federal treasury to farm-aid recipients – most of whom have no business getting it.
Take, for example, Ethyl Corporation. Based in Richmond, Ethyl makes vehicle-fuel additives. Yet according to the Environmental Working Group's exhaustive database, Ethyl has received more than $162,000 in farm subsidies since 1995. Ethyl's parent company, Newmarket Corp., is valued at $3.67 billion. Imagine the dire straits it would have been in without those corn payments.
Ethyl isn't alone. The Rockerfeller family has received federal farm aid. So has rock star Jon Bon Jovi. And the Virginia Department of Corrections, which has collected more than $180,000 in farm payments. Examples such as those are funny, but the bigger picture is not. Most farm subsidies go to big corporate farms, not small family operations: Three-fourths of all big farms get federal help. Three-fourths of all small farms don't.
Congress finally is getting serious about reforming this system. But instead of simply deleting it, lawmakers seem intent on replacing it with something slightly less awful: more expanded crop insurance.
Crop insurance compensates farmers and farming companies for crop failure or damage. Uncle Sam foots 62 cents out of every dollar a farm spends on crop insurance. This does two things: It encourages farmers to take unnecessary risks, and it costs taxpayers a gawdawful lot. Merely cutting Uncle Sam's share to 52 cents on the dollar would save more than $1 billion a year.
Reform has been slow to come for a couple of reasons. The first is demosclerosis: A rich and powerful minority is highly motivated to lobby for the continuation of its benefits – benefits that do not much inconvenience most of the public on a day-to-day basis, which therefore has little reason to lobby against them.
The second reason is the unholy pact between farm-state interests and urban ones. For reasons far beyond the ken of mortal men, the largest portion of the quinquennial farm bill as measured in dollars has nothing to do with farming. Roughly 80 percent of its outlays go to food stamps. Rolling the two completely separate issues into a single bill ensures that lawmakers from conservative states will support handouts for city folk, and lawmakers for city folk will support handouts to farm interests.
Or at least most of the time. There are exceptions. Stephen Fincher, a Republican congressman from Tennessee, wants to slash food stamps even though he personally has collected $3.48 million in farm subsidies over the past 13 years. Kid you not.
Fincher is not alone in wanting to cut food stamps. Nor, for that matter, is he even wrong. The House version of the farm bill would cut the Supplemental Nutrition Assistance Program by $20 billion. Progressives denounce this as heartless and cruel, and it certainly might seem so until you consider the context.
Here's the context: Four decades ago, only 2 percent of Americans received food stamps. By 2000, that figure had tripled to 6 percent. It is now 15 percent, thanks to expanded eligibility terms and aggressive efforts by the federal government to enroll as many people as possible. Food-stamp spending, which has doubled under President Obama despite what ostensibly passes for an economic recovery, has quadrupled since 2000.
The $20 billion cut proposed by the House would come out of a proposed 10-year outlay of roughly $770 billion. In other words, it amounts to a 2 percent cut on top of a 400-percent increase. That's like ordering a banana split but skipping the cherry because you're on a diet.
And since food-stamp spending constitutes 80 percent of farm-bill outlays, total agriculture-policy spending is slated to soar as well. After adjusting for inflation, the new farm bill will lock in spending 39 percent higher than under the previous farm bill. Congress is saving America right into the poor house. But at least the Rockefellers were well taken care of.
This article originally appeared in The Richmond Times-Dispatch.