Pruning Farm Subsidies

by Victor Davis Hanson

Tribune Media Services

In times of massive deficits, why are we borrowing millions to subsidize profitable agribusiness? Lots of presidents have asked that question. George H. W. Bush tried to cut farm subsidies. Bill Clinton did, too. George W. Bush wanted them ended as well. All failed.

The so-called “Freedom to Farm Act” of 1996 was supposed to stop farm supports for good, by offering the carrot of extending crop payouts to growers, regardless of current commodity prices, in exchange for ending the flow of federal money altogether after a slow weaning-off period of seven years. But when it came time to honor the agreement, suddenly a new rationale appeared — that of post-9/11 security. So crop subsidies reappeared under the “Farm Security and Rural Investment Act of 2002,” on the dubious premise that in a new terrorist climate, Americans needed to ensure the prosperity of agribusiness. In today’s bureaucratese, remember, “investment” translates into the government borrowing more money to distribute to special interests.

When worries about national security gradually died down, and when it was clear that agribusiness would not accept the ending of subsidies as promised over a seven-year period, a new justification arose: providing fuel for an energy-strapped America under the “Food Conservation and Energy Act of 2008” — a $288 billion, five-year agricultural bill. Supposedly farmers now needed massive crop subsidies to ensure our independence from foreign oil producers and sky-high gas prices.

Even presidents cannot stop Congress from passing these unnecessary farm bills, because they are brilliantly, one might say cynically, conceived. Such federal support always uses the current crisis of the day — whether the promise is to cut the deficit, protect the country, or provide new energy.

Two disparate special interests push massive federal agricultural subsidies. Agribusiness wants lots of government money; the entitlement industry wants more food stamps and rural programs. Combine them, and we spend billions more each year to subsidize both constituencies. Who can stop a bill pushed through by Kansas conservatives and Chicago community organizers — especially when multiyear farm legislation always seems to start at or near election time? What politician wants to go on record against “family farmers” or the urban “needy”?

But 2012 is finally the time to end the crop-subsidy business, with the annual budget deficit approaching $1.5 trillion in 2011, farmers receiving record prices on the open market, and the new conservative House of Representatives having been elected on the promise of fiscal responsibility.

Corn reserves are at their lowest point in 15 years, after prices skyrocketed nearly 70 percent in almost one year. Escalating world wheat prices have caused unrest in the Middle East. Soy, dairy, and meat prices are likewise reaching record levels. In other words, a growing world population, increased affluence abroad, demands for higher-priced meats and vegetables, and diversion of prime cropland for biofuel from Europe to Brazil have — in perfect-storm fashion — made food a lucrative business.

We need a drastic reset of agricultural policy. The use of prime ag land to grow corn for ethanol biofuel makes no sense. Why divert farmland for fuels when the world’s poor are short of food, and there are millions of unfarmable areas in Alaska and the arid West, as well as off the American coast, that either are not being tapped for more efficient gas and oil or are only partially exploited?

When North Americans do not fully utilize their own fossil-fuel resources, two very bad things usually follow: First, someone in Africa, Asia, or Russia is far more likely to harm the environment in order to provide us with oil; and second, precious farmland is diverted to growing less efficient biofuels instead of food — and billions worldwide pay the price.

No supporter has ever been able to explain why the advent of massive subsidies over the last half-century coincided with the decline, not the renaissance, of “the family farm.” Nor has anyone offered reasons why cotton, wheat, soy, sugar, and corn are directly subsidized, but not, for example, nuts, peaches, or carrots.

Finally, the United States is supposed to be the world’s premier free-market economy, based on the principles that competition is good and that entrepreneurs freely reacting to markets create more wealth when unfettered by government red tape. Why, then, would the conservative agribusiness community want government intrusion that warps world food markets, ends up hurting the global poor, and contributes to an unsustainable national debt?

In the next few years, conservatives are going to have to cut entitlements and social spending. To retain their credibility, they must apply the same standards of fiscal responsibility to agribusiness that they apply to other areas.

©2011 Tribune Media Services

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