‘F’ is for Farm Subsidy | Citizens Against Government Waste

‘F’ is for Farm Subsidy

The WasteWatcher

In anticipation in the next few weeks of markup of Title I farm subsidy programs in the House Agriculture Committee, CAGW released Making the Grade: CAGW’s Report Card on Farm Bill “Reform” Proposals.

Grades were given for the following proposals: current law, the Bush Administration proposal, the Citigroup “buyout” plan, the Cato Institute “buyout” proposal, the American Farm Bureau Federation (AFBF) and National Corn Growers Association (NCGA) “revenue insurance” plans, and “risk management accounts,” such as those proposed in S. 1422 and H.R. 2720, The Food and Agriculture Risk Management for the 21st Century Act (FARM-21).

Each was evaluated for the following categories: fairness in targeting benefits to the small farmers that actually need help rather than simply lavishing exorbitant subsidies on the wealthiest farmers, providing relief to taxpayers and consumers, promoting rural development, promoting international trade, and providing benefits to farmers in developing nations.

Most payments go to the biggest farmers, which contributes to farm consolidation and higher land prices, resulting in fewer jobs in all agriculture-related businesses in rural areas and loss of population.  Farm subsidies are also an obstacle to expanding international trade, since the failure of the U.S. government to make further concessions on farm subsidies has been one of the principal roadblocks to progress on a five-year-long effort to forge a global trade agreement.  Also, subsidies to U.S. farmers encourage them to grow surplus crops that undercut farmers in developing nations.

Current law and the AFBF and NCGA proposals received a failing grade, while the administration proposal and the Citigroup “buyout” plan received a “D” for their final grades.  Only two proposals, the Cato Institute “buyout” plan and FARM-21, received respectable grades of “B,” truly qualifying as “reform” proposals.

The Cato Institute proposal would be the best in the long run at completely getting the government out of the business of running agriculture policy, while FARM-21 recognizes the political difficulty of completely ending some sort of “safety net” for farmers, even though it is no longer really necessary.  FARM-21 would save taxpayers $4.4 billion over five years and more than $20 billion over 10 years.

John Frydenlund