Gulp.
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.
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Interesting blog! So when you say, "But for now, I intend to put my money where my mouth is -- literally!", does that mean farmers can (do?) return the farm subsidy payments?
ReplyDeleteExcellent question. First off I should say that I could have articulated my point more clearly. Perhaps that is one of the dangers of giving a farmer the power of the pen. What I meant by my initial statement was that for too long many farmers (including me) have passively accepted -- and even encouraged -- these direct payments as a necessary part of business. Ask many of us behind closed doors our REAL opinion of them and we might be more critical, but publicly it's difficult to bash someone who's writing you a check. My intent was to point out the failed policy in the receipt of these payments -- even at the risk of losing them.
ReplyDeleteUnfortunately I do still cash these checks. Believe me, I am well aware of the intellectual hypocrisy at work here. The sad truth is that as long as other farmers (my competition) cashes these same checks, I must do the same in order to stay in business. That's why I think ALL direct payments must go. No preference should be given to farm size, structure or income levels. The government shouldn't be picking winners and losers. And they shouldn't be handing out welfare disguised as sound farm policy.