A cornucopia for rich farmers

Farm subsidies will cost each US household about $320, the price to please agribusiness.

from the May 14, 2008 edition

What can $100 million buy you in Congress? If you're agribusiness, such money spent this past year on lobbying and campaign donations will harvest billions in farm subsidies and keep you in clover for another five years.

Congress plans to renew the US agriculture law this week with no apologies for that fact that most of the subsidies will go to the wealthiest 10 percent of recipients and that a majority of this largess will enrich commercial farmers with an average income of $200,000.

And the ultimate cost to each US household for this congressional cornucopia? About $320 a year in taxes and higher food prices – beyond the already inflated prices at supermarkets. Oh, and then there's the likely retaliation by other countries against such trade-distorting farm subsidies and the expected loss in further opening global trade.

All this for a "temporary" law born during the Dust Bowl of the Depression to help only the poorest family farmers. If anything, regular renewal of the federal government's largest corporate-welfare scheme has only squeezed out family farms by favoring big commercial ones, which carry the most clout on Capitol Hill.

What makes this payoff to corporate farmers so indigestible this time around is that it comes when food producers are making record profits from high global prices and subsidies for grain- and sugar-based ethanol. Since the last renewal of the farm law in 2002, farmer income and crop prices have more than doubled.

But despite such stubborn facts, this is an election year, and money still talks to lawmakers in search of campaign cash for reelection.

Congress decided to largely dismiss serious proposals for reform from President Bush and from Sens. Richard Lugar (R) and Frank Lautenberg (D). The president, for instance, wanted to cap direct payments to farmers who earn more than $200,000 in adjusted gross income. But the final bill allows payments to those who earn more than $1.5 million as a couple or $750,000 as an individual. And nearly all of the approximately $25 billion in subsidies will still go to support only five crops: wheat, cotton, corn, soybeans, and rice.

Mr. Bush plans to veto the bill but because it conveniently includes nonfarm spending on such programs as food stamps, a coalition of rural and urban lawmakers is likely to thwart the president – and common sense. The bill also comes loaded with specific benefits – such as $170 million for the salmon-fishing industry – to ensure support of key lawmakers. It's too bad Congress couldn't wait until next year to pass a bill when election pressures would have been less, and also pass the nonfarm parts separately.

One particularly bad result of this rush to please agribusiness is one provision in the bill that would create a $4 billion disaster program for farmers hit by drought or other weather damage. The effect of this add-on will be that farmers will now plant on land that is too dry or environmentally fragile, only to later expect a government handout.

The saddest part is that the public has come to accept this regular five-year cycle of political corruption. And with Iowa as the lead-off state in the presidential contest, contenders for the White House only ride along on this gravy train.

Unless Americans sow cleaner politics, they will only reap higher taxes and food prices.