"It seems a rare act of civic sacrifice: in the name of deficit reduction, lawmakers from both parties are calling for the end of a longstanding agricultural subsidy that puts about $5 billion a year in the pockets of their farmer constituents. Even major farm groups are accepting the move, saying that with farmers poised to reap bumper profits, they must do their part.
But in the same breath, the lawmakers and their farm lobby allies are seeking to send most of that money — under a new name — straight back to the same farmers, with most of the benefits going to large farms that grow commodity crops like corn, soybeans, wheat and cotton. In essence, lawmakers would replace one subsidy with a new one.
“We are very much aware of the budgetary constraints of the federal government,” said Garry Niemeyer, an Illinois farmer who is president of the National Corn Growers Association. “We want to do our part as corn growers to help resolve those issues, but we only want to do our proportional part. We don’t want to have everything taken out on us.”
But Vincent H. Smith, a professor of farm economics at Montana State University, called the maneuver a bait and switch.
“There’s a persistent story that farming is on the edge of catastrophe in America and that’s why they need safety nets that other people don’t get,” he said. “And the reality is that it’s really a very healthy industry.”
The subsidy swap is gaining momentum as lawmakers seek to influence the cuts in farm programs that are expected to be made by a special Congressional panel charged with slashing $1.2 trillion from future budgets.
On Monday, leaders of the House and Senate agriculture committees said they were preparing recommendations for $23 billion in unspecified cuts over 10 years, far less than some other proposals.
Lawmakers’ reluctance to simply eliminate a subsidy without adding another in its place demonstrates how difficult it is for Washington to trim the federal largess that flows to any powerful interest group. Indeed, the $5 billion program that lawmakers are willing to throw under the tractor, known as the direct payment program, was created in 1996 as a way to wean farmers off all such supports — and instead was made permanent a few years later.
The new subsidy is being championed by Senator Sherrod Brown, Democrat of Ohio, and Senator John Thune, Republican of South Dakota.
Mr. Thune, a leading voice in favor of deficit reduction, received at least $80,000 in campaign contributions since 2007 from political action committees associated with commodity agriculture, according to data compiled by the nonpartisan Center for Responsive Politics, which tracks campaign spending. Mr. Brown has received $5,500 in PAC contributions from such groups in that period.
It is unclear how much support a new subsidy would garner, since many lawmakers view farm programs as a likely source of budget savings.
Critics say that farm subsidies today have little to do with helping struggling family farmers. Instead, they go predominantly to well-financed operations with large landholdings. All told, the subsidies amount to about $18 billion a year — about half of 1 percent of the federal budget.
An analysis of federal data by the Environmental Working Group, an advocacy group that tracks farm subsidies, showed that the top 10 percent of direct-payment recipients in 2010 received 59 percent of the money under the program. Those 88,000 people, including farmers, their spouses and absentee landowners, got an average of $29,598.
In lean times, such support might seem vital, but in recent years commodity farmers have done well.
The Agriculture Department forecasts that farm profits this year, measured on a cash basis, will total $115 billion, 24 percent higher than last year, thanks to soaring crop prices. Adjusted for inflation, profits are expected to be at their highest level since 1974.
The average income for farm households has been higher than general household incomes every year since 1996. The average household income was $87,780 for all farms in 2010, and $201,465 for families living on large farms.
“How do you justify this kind of money going to a sector of the economy that’s booming while other folks in the country are suffering?” Craig Cox, a senior vice president of the Environmental Working Group, said of the subsidies.
Lobbyists and farm-state lawmakers have long argued that farmers face risks, like bad weather, pests and volatile markets, that merit special treatment.
Direct payments have come under fire, however, because farmers get them whether markets are high or low. The new subsidy, called shallow-loss protection, would act as a free insurance policy to cover commodity farmers against small drops in revenue.
Most commodity farmers already buy crop insurance to protect themselves against major losses caused by large drops in prices or damage to crops. Those policies typically guarantee 75 to 85 percent of a farmer’s revenue, with the federal government spending $6 billion a year to pay more than half the cost of farmers’ premiums.
The proposed new subsidy would add another layer of protection to guarantee 10 to 15 percent of a farmer’s revenue, paying out not only in years of heavy losses, but also when revenue dipped less severely.
The shallow-loss plan getting the most attention is in a bill introduced last month by Senators Brown and Thune that would simplify and expand an existing program.
Gary D. Schnitkey, a professor of farm management at the University of Illinois, said the Brown-Thune plan would help protect farmers during longer periods of depressed prices. Without such a program, he said, “we would see financial stress and we would see farmers go out of business.”
It is unclear how much the proposal would cost taxpayers. Dr. Schnitkey said the plan could pay farmers $40 billion over 10 years. That would be $20 billion less than the programs it replaced, including direct payments and some smaller subsidies.
But Dr. Smith, the Montana State economist, said the cost could be much greater because the plan used recent high crop prices as its benchmark.
“If farm prices move back towards what are widely viewed as more normal levels than their current levels, farmers will be compensated for going back to business as usual,” he said.
In a statement Senator Thune said the proposal in the bill “corrects inefficiencies in several farm programs with a streamlined and cheaper approach.”
Representative Marlin A. Stutzman, an Indiana Republican, said that a shallow-loss plan would give farmers more flexibility in managing risk. “Farmers shouldn’t have to pay the brunt of the deficit problem,” he said.
Mr. Stutzman and Senator Richard Lugar, also an Indiana Republican, included the Brown-Thune plan in matching farm bills they introduced this month.
Congress is due to write a new five-year farm bill next year, but some lawmakers want to use the deficit-cutting process to revamp farm spending. President Obama has proposed cutting $33 billion from farm programs over 10 years, including ending direct payments without adding a shallow-loss program. Mr. Stutzman’s bill would slice $40 billion, with more than half coming from programs like food stamps and soil and water conservation."
So if farmers shouldn't pay the brunt of the deficit, and we can't afford to pay it, who should? I say place the blame squarely where it belongs: Congress. Make them take a pay and benefits cut for the next decade. After all, they're the ones who did the overspending.
Maybe we should look at laying off the number of representatives to each state, since jerrymandering creates new districts for them to represent anyway! Maybe we could cut off their access to that congressional gym where Anthony Weiner seems to think it's okay to sext from. Maybe we can cut their travel options to coach from first class or business class.
How about doing away with the congressional barber/beauty parlor, and the catered cafeteria? then maybe we ought to look outward from there--yes, the farmers ought to be hit, as well as anybody else getting federal subsidies of any kind. Let's make welfare and food stamps taxable just like unemployment, and tax the churches.
What say we get the Congress-critter themselves off the farm subsidy payroll, then go after CEOs like Larry Ellison, and Bill Gates, and then go after the pro sport stars like Kareem Abdul-Jabbar, Scotty Pippin, and others? Let's put REAL farmers on the payroll, and not farmer-wannabes in it solely for the subsidies, and take off the corporate farmers, because clearly they don't need them!
The problem is that if you go after the farmers, you directly bombard the mass food supply. Prices skyrocketed, lessening the need for subsidies, and if prices ever returned to "normal", then the subsidies would kick back in (the base cost now being reset to the higher prices). The same also goes for the oil/gas industry--they were getting tax breaks equivalent to subsidies, and the higher the price of oil/gas goes, the less they were making on the tax breaks.
In order for the Congress to pay down the deficit by use if subsidies (or lack thereof), we'd be looking at these high prices into perpetuity, and farmers would go out of business because of lack of demand due to those high prices.
The Larry, Moe, and Curly running this country have painted us into a corner, and getting out of it's gonna be messy.
Posts
0 comments:
Post a Comment