April 19, 2002

April 19, 2002 | Commentary on Federal Budget

Farm Policy: Renew, Then Redo

Mid-April means tax time for all Americans, but for farmers, it means planting time as well.

Until this year.

This year, farmers can't plant - can't even plan what crops to grow - because Congress hasn't decided on a farm policy for the year. Until Congress decides which crops to subsidize and at what levels, banks that serve farmers can't lend the money for seed and supplies to get the process started. No plan from Congress means no plan from farmers, which means no loans from banks and, alas, no planting as critical spring days pass.

A farm policy exists. The 1996 farm law doesn't expire until October. But members of Congress not only want to revise farm legislation, they want the new provisions to take effect this year. However, they left for a two-week Easter recess without deciding on a new farm policy. The House and Senate each have passed bills, but a conference committee assigned to reconcile them has yet to complete its work.

Which brings us to the present bind.

Congress should abandon attempts to revise farm policy this year, extend the current legislation through the growing season of 2003, then get to work bringing true reform to farm policy.

The 1996 Freedom to Farm legislation aimed to bring real reform. It sought to wean farmers, particularly large agri-business companies, from federal farm subsidies and allow farmers to grow the crops they want rather than what the government tells them to grow.

But each year since 1996, various groups of aggrieved farmers have convinced Congress they face doom unless the government bolsters subsidies. As a result, subsidies now dwarf even pre-1996 levels, even though 60 percent of family farmers receive no subsidies and the top 10 percent of subsidy recipients receive three-fourths of the money.

The bills in Congress won't make things better - both propose Americans dole out $17 billion per year in farm subsidies, perpetuating what has become a huge corporate-welfare program. For just $4 billion, Congress could provide enough income to bring every farmer in America into the middle class.

That wouldn't make for good farm policy either, but at least the money would be spent as the vast majority of Americans expect - to help struggling family farmers. Not on Fortune 500 companies such as Chevron and John Hancock Mutual Life Insurance or individuals such as billionaire banker David Rockefeller, multimillionaire basketball star Scottie Pippen or 15 members of Congress, nearly all of whom receive far more than the annualmedian farm subsidy of $935.

The way subsidy programs work now - the more you grow of selected crops, the more you receive - bestows a huge advantage on corporate farms, which have larger tracts and thus more favorable economies of scale. Corporate farms then use the subsidy money to buy out family farmers, the supposed beneficiaries of farm programs. Thus, corporate farms already control three-fourths of rice farming in America, and similar consolidation is expected in wheat, soybeans, corn and cotton - unless present policies change.

Both bills propose the largest farm subsidy program in world history - at a cost of $4,400 per family over the next 10 years. Both propose that current subsidy programs continue more or less unchanged. Both reflect not the interests of Americans in general but the interests of corporate and other wealthy farmers who have spent nearly $70 million since 1999 on campaign contributions.

Farmers, like everyone else, need to stand on their own. If they can't, and if Americans think it's worth millions of dollars to preserve family farms, Congress needs to redesign farm policy toward that end rather than give subsidies, literally, to Rockefellers.

For the time being, the best we can hope for is that Congress extend the present policy so farmers can plant, wait until November, when election pressures abate, then get to work truly making things better for farming in America.

Brian M. Riedlis the Grover M. Hermann fellow in federal budgetary affairs at The Heritage Foundation, a Washington-based public policy institute.

About the Author

Brian M. Riedl Grover Hermann Fellow in Federal Budgetary Affairs
Thomas A. Roe Institute for Economic Policy Studies

Related Issues: Federal Budget

This Op-Ed originally appeared in the Washington Times.