Slopping the Hogs

Every five years, Congress goes through the farm support debate. On June 10^th, the U.S. Senate took the first step in passing its continuing farm welfare subsidy support payments that, if passed, will cost just short of a trillion dollars over the next decade. For rural states, farm subsidies are sacrosanct, but as many Tea Partyers in the House are aware, such expenditures are a counter-policy boondoggle. Is there enough opposition in the House to trim the number? Expect some cuts, but the program is very likely to continue for the foreseeable future. Where those cuts are likely to come just might surprise you.

The system pays big bucks to farmers not to grow specified crops (usually involving crops like wheat, corn, cotton, rice, etc.), and one way or the other covers crop losses due to weather issues and a fall in market prices. While the direct payments for market drops are probably going away, the “indirect” system that effects the same result – heavily taxpayer subsidized crop insurance – remains.

The June 1^st-7^th Economist tells us that U.S. taxpayers are covering two-thirds of farmers’ premiums and most of their claims. Even as the new legislation cuts the premium subsidy slightly, the costs to the system are absurd. Of course as commodities prices skyrocket – places like China are witnessing an explosion of new members of the middle class with a growing taste for higher quality foodstuffs – American taxpayers aren’t really getting the benefits of that massive new profit center. And since crop prices are near an all-time high, if the measure of a market drop is this new record level of performance, American taxpayers are in for some real pain.

This system rewards farmers for taking environmentally-risky plantings, where crop loss is high but rewards for bucking the risks much higher… if they can be overcome. The big drought generated $17 billion in payouts last year. “Handouts for American farmers were a tasty $256 billion between 1995 and 2012.” Economist. This isn’t just a benefit for your average small farmer; big corporate farms get the biggest benefits. We’ve also had import barriers lobbied into existence for agricultural commodities like sugar and ethanol to protect U.S. farmers whose products just cost more than prices from other countries.

For ultra-conservatives from rural states, the battle line tends to be more against that part of the farm bill that supports the lower socio-economic (and mostly Democratic) class of America: food stamps. While this program enables those with low incomes to buy our farmers’ output to a higher level, they are the “easy button” when it comes to a conservative political cause. “Republicans complain that claiming food stamps has become too easy under President Barack Obama – the number of claimants has risen from 26.3m in 2007 to 47.6m today.” Economist. That this increase has occurred precisely during our recession and failed recovery years goes unnoticed.

Food stamps are in House Tea Party headlights: “The Senate bill would cut $24 billion from current spending levels, including about $4.1 billion from food stamps over the next 10 years. Groups fighting hunger said the cuts in food stamps would put millions of poor families at risk. A House version of the bill [which reflects the leanings of the Republican majority] would provide for food stamp cuts of $20 billion, just one major example of how far apart the two houses are in adjusting spending.

“In the House, the farm bill faces a much tougher road. Last year, conservative lawmakers helped kill the bill because of their desire for deeper cuts in the food stamp program, which serves about 45 million Americans…  Hoping to satisfy conservatives, the House Agriculture Committee recently increased the amount of cuts to the program to the $20 billion mark over the next 10 years, up from $16 billion in last year’s bill.” New York Times, June 10^th.  The Democratic-heavy Senate is unlikely to pass this version. With rural votes having been gerrymandered into having significantly more effective voting power than accorded to urban voters, farm welfare – even for mega-farm corporations – is the kind of welfare that draws conservative support… unless you need food stamps to survive.

I’m Peter Dekom, and what happened to that rural ethic of an independent farmer not remotely reliant on big government for much of anything?