July 11, 2006
SUMMARY: A decade on, it's
safe to conclude “Freedom to Farm” reforms are a complete failure.
When it comes to single mothers and their children, the tough-love approach to
welfare reform that began a decade ago has produced stunning results. Welfare
caseloads nationally have declined by nearly half as monthly entitlement
checks have been replaced by strict and structured welfare-to-work programs
encouraging those who are able to stand on their own two feet.
But reforms instituted at about the same time intended to get farmers off the
dole and to stand on their own have been a miserable failure. “Freedom to
Farm” reforms instituted shortly after Republicans took control of Congress
in the mid-1990s were supposed to wean farmers off government subsidies and
unleash their entrepreneurial energy by getting rid of inefficient government
programs that had the effect of micromanaging farms. Rather than reduce
subsidies, however, the effort has led to even greater subsidies, including
billions of dollars paid out for no good economic or agricultural reason. Farm
subsidies bear little relation to the nation's overall food needs - or
economic theory. Farmers of certain crops receive handsome subsidies; those
who grow other crops get nothing. Subsidies bear no direct connection to the
farmer's finances or the nation's need for what he produces. Indeed, some
subsidies flow to people who don't farm at all.
A review of farm subsidy programs
by reporters at the Washington Post, culminating in a special report published
July 2, concludes that “farm subsidy programs have become so
all-encompassing and generous that they have taken much of the risk out of
farming for the increasingly wealthy individuals who dominate it.”
Among their findings:
Since 2000 alone, the government has paid at least $1.3 billion in subsidies
to people who don't farm, many who don't even own farms. Subsidies for given
acreages once farmed continue even after the sale and subdivision of farms,
with payments flowing to the new landowners. Some farmers who leased ground
have lost their leases because landowners can make more money by collecting
subsidies than by leasing land for cultivation.
Farm subsidies have driven up the price of farmland, making it harder for
smaller operators to start or expand farming.
Many farmers collect subsidies intended to compensate for low market prices
even when their crops sell for good prices. Other farmers harvest disaster
payments for crop losses even though their crops are insured by subsidized
crop-loss insurance.
In the decade since Congress first voted to do away with Depression-era farm
entitlement programs, taxpayers have paid some $172 billion in farm subsidies.
In 2005, a year of near-record pre-tax farm profits, subsidies totaled more
than $25 billion - an amount most remarkable because it's 50 percent higher
than what the government paid for families on welfare that year.
When “Contract with America”-waving GOP lawmakers took control of Congress
in 1994, they set about ending the patchwork of farm assistance programs that
had grown during the 40 years Democrats had controlled Congress. The farm
safety net instituted during the 1930s, they argued, had grown and mutated
into a system that prevented agriculture from reaping the benefits of the free
market more than protecting farmers from risks of the free market. To overcome
farm-state opposition, Congress offered fixed payments to farmers to offset
the phase-out of complicated subsidy programs.
The payments started, but the subsidies never ended. In fact, they've grown.
In the mid-1990s, Senate Agriculture Chairman Richard Lugar, R-Ind., asked,
“Why should taxpayers subsidize farmers when they do not subsidize small
business?” Nobody asks questions like that today. The answer is obvious:
Farm-state politicians have a lot of clout in Congress, and neither political
party wants to rile the farmers.
A decade ago, the GOP promised to “end welfare as we know it.” That they
did. But farm subsidies that are welfare in everything but name - welfare as
few people knew it - live on.