Capital Commentary is the weekly current-affairs publication of CPJ, written to encourage the pursuit of public justice.

Retarget the Farm Subsidies

James Skillen


August 27, 2001

"We eat cheaper than anyone else in the world," says Frank Lucas (R-Okla.), a subcommittee chairman on the House agriculture committee (Washington Post 8/17/01). That, he says, is a testimony to the success of the federal government's farm subsidy programs, which began during the Depression of the 1930s.

Circumstances have changed since the 1930s, however, and the Senate agriculture committee now faces a serious challenge left to it by the House committee, which adopted a 10-year, subsidy-loaded farm bill last month.

"At issue," according to a New York Times report (8/12/01), "is whether the huge $171.1 billion farm bill will continue to focus on subsidies for large farmers who grow basic crops like cotton, corn and wheat, as in the House measure, or whether the money will be spread to promote trade, conservation efforts, rural development and environmental protection, as in the proposed Senate bill."

For years following the Depression, federal subsidies helped family farmers stay in business when droughts and other disasters threatened their very existence. Gradually, the subsidy system got attached to the crops and produce—cotton, corn, milk—which often led to overproduction. There is now more and more talk about farmers learning to "farm" the federal government as much as they farm the land.

The growing federal subsidy and support system also encouraged the growth of ever larger farms and agricultural conglomerates along with the decline in the number of family farms. In North Carolina, for example, the largest pork producer, Smithfield Foods, actually owns the hogs on many farms. Farmers rent and raise the hogs, but Smithfield owns them and produces the hams and other pork products.

In 1996, Congress finally decided to do something about the burgeoning subsidies that were, in essence, promoting the growth of corporate agriculture at the expense of family farms, creating corporate "welfare dependency" in the agricultural sector, and distorting domestic and global markets in farm goods. Congress reduced and retargeted many of the subsidies. Smaller farmers were supposed to suffer less of a disadvantage, all were to become more market-wise and less dependent on government handouts, and the government would direct more spending to water and soil protection in farm country.

The 1996 law did not hold up for long, however. Ignoring or turning away from many of the structural reforms of 1996, Congress has been doling out "emergency" subsidies at a rate higher than ever before. And that is exactly what the House agriculture committee continued to do in its version of this year's farm bill, which is supposed to extend for 10 years instead of the traditional five.

This is the challenge that now confronts the Senate where liberal Democrat Tom Harkin (Ia.), chair of the agriculture committee and moderate Republican Richard Lugar (Ind.), the committee's ranking minority member, both seem to agree that the House is mistaken.

Harkin and Lugar are right, in my view, and they ought to lead Congress back to the reform track of 1996. Mr. Lucas's celebration of the "cheap eating" we enjoy in this country is not the whole truth if one takes into account the billions citizens pay in taxes to subsidize corporate agriculture unnecessarily. Nor does the celebration make sense if one takes into account increasing water pollution, the cost of clean up, the decline of rural communities, and the continuing reduction in the number of farm-owning families—those who have a stake in the land for the long term, over many generations.

Retarget the money and return to the basic structural reforms that were initiated in 1996!

—James W. Skillen, President
   Center for Public Justice

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Capital Commentary is a weekly current-affairs publication of the Center for Public Justice. Published since 1996, it is written to encourage the pursuit of justice. Commentaries do not necessarily represent an official position of the Center for Public Justice but are intended to help advance discussion. Articles, with attribution, may be republished according to our publishing guidelines.”