I have said this before to any who would listen, but this is the first time I have written these words, for the record, in a public forum.
Farm subsidies in the form of direct payments to farmers need to go.
They are bad for the industry, bad for farmers and bad for taxpayers. They are an easy mark for the media, the socio-political elite, and the under-informed public. They get all the attention in the "multi-billion dollar" farm bill yet are only a very small part of the overall spending -- a distant cry from the food and nutrition support (food stamp) portion of the bill. At today's prices they amount to less than 3-4% or so of the gross income on every acre of grain production. Even then, ag economists are generally in agreement that they are capitalized into the expense side of the production equation (especially in land costs). Yet the general public sees them as "income" or welfare payments to farmers. They are not. Famers merely pass them along to landowners, equipment manufacturers and other input suppliers.
Farmers are rightly seen as frequent fiscal conservatives. As a group we tend to tilt to the right, favoring free trade, smaller government, and reduced market intervention. Yet when talking about direct payments, farmers, our industry representatives and farm belt legislators tend to circle the wagons.
Direct payments are not a sacred cow. Nor should they be -- especially not now. Budgets at the federal, state and local levels are a mess. Some would argue that direct payments are such a small part of the overall budget mess that the public is being misled as to their overall significance. I couldn't agree more -- and that's part of my point! We need to focus on the big-ticket items. Medicare/Medicaid, Social Security, meaningful Health Care reform, military and public-sector employment spending. Direct Payment ag subsidy spending IS a drop in the bucket. Focusing on it is a game of smoke and mirrors.
Am I against all public spending support of agriculture? Not necessarily. There are some expenditures which I believe the public gets a positive return on their investment dollar. Crop insurance, some conservation programs and (historically) renewable energy. Even then, I think we need to take an honest look at them and do a better job of justifying their continued need. In future blog entries I will try to discuss the merits (or lack thereof) of some of those programs. But for now, I intend to put my money where my mouth is -- literally!
Direct Payment subsidies for all farmers should go. And the sooner the better.