The US-based Internet website free-market.net regularly considers a number of policy issues and options. In a recent article it looked at the implications and cost of the new US Farm Bill. As Canadian politicians, farmers and agricultural organizations still consider how to respond to the Bill, it’s worth pondering what US analysts are saying about the policy and the government that hatched it. In part, the article read:
The [new US] farm bill is so over-the-top that even some members of the Senate — a body that rarely shows enthusiasm for reining-in government expenditures — are showing signs of embarrassment. Senator John McCain called the legislation “an appalling breach of federal spending responsibility.”
Why such embarrassment? Well, the Congressional Budget Office says the legislation increases agriculture spending by $82.8 billion over the next 10 years. That’s nearly an 80 percent hike over the cost of existing programs, and almost $10 billion more than the bill was originally expected to siphon from taxpayers’ pockets.
That’s an awful lot of money to be ponying up at a time when the federal budget surplus has evaporated and Americans are shouldering the cost of a “war on terrorism.”
Just as perverse, says Jonathan Tolman of the Competitive Enterprise Institute, is the inevitable result of guaranteeing farmers high prices for their products. His 1995 study found that agricultural subsidies harm the environment by stimulating unnecessary production at prices that ignore real-world market conditions. Subsidies give incentives to bring marginal land into production and to get crops with intensive use of fertilizer and pesticides. Tolman suggested that “a fifty percent reduction in subsidies would decrease per acre chemical use by an estimated 17 percent and fertilizer use by an estimated 14 percent.”
Worse, the new spending is exactly what Congress tried to eliminate just a few years ago. The 1996 “Freedom to Farm Act” was intended as a first step in weaning U.S. agriculture off government subsidies so that farmers could compete and succeed — or fail — in a free market just like the majority of Americans.
In a desperate play for votes in rural swing states, the new farm bill returns to a system of guaranteeing farmers high prices for their products – a promise that can be made only when backed by the wallets of taxpayers who enjoy no similar security.
The farm bill isn’t just a burden to Americans at tax time — it’s a menace in other ways, too. According to David Orden and Robert Paarlberg of the Cato Institute, the bill “will damage U.S. positions in international trade; foreign countries will respond by maintaining restrictions on the importation of American-made goods and will continue, and even increase, subsidies to their own farmers.”
The European Union is already poised to retaliate against the U.S. for steel tariffs. Now the EU says it’s prepared to challenge the subsidies before the World Trade Organization, raising the prospect of a nasty trade war.
Kevin Schmiesing of the Acton Institute, an organization that examines policies from a moral and religious perspective, worries that maintaining farmers as federal supplicants breaks down their relationships with their communities. It prevents the development of local social connections that might deal with real problems better than distant bureaucrats ever could. “Governmental subsidies gloss over individualized needs and chafe at the natural bonds of community, discouraging the recognition of interdependence among farmers that could go a long way toward providing a safety net in times of hardship,” he says.
So the new farm bill drains taxpayers in order to keep farmers on the dole so that they’ll use marginal farmland to grow crops for which there’s no real market. In the process, the federal government gains control over our pantries, the environment suffers, communities erode and a trade war simmers.
That’s quite a crop of grief that Congress has cultivated.
Kevin Avram sits on the Prairie Centre’s Board of Trustees. “Where Do We Go From Here” is a feature service of the Prairie Centre.
NOTES: *See: CORPORATE WELFARE: FARMERS ON THE DOLE at www.free-market.net (Free-market.net is a project of the Henry Hazlitt Foundation.)