By Derek Larson
If there's one thing liberals and conservatives should agree on, it's that we all need to eat.
The politics of compromise were on display last week as the House passed a farm bill that drew few headlines outside the agricultural press despite its almost $300 billion price tag.
But all Minnesotans should be paying careful attention to this legislation. The final bill will shape our agriculture and food policies for the next five years and offers a chance to reform outdated subsidy programs that give away tax money to agribusiness millionaires.
Unfortunately the House bill is a collection of half-steps that represents more missed opportunities than it does reform, and regular Minnesotans will end up paying for it.
If your first response is "I'm not a farmer so why should I care?" remember this: American farms are the safest, cheapest and most reliable source of food we have. Recent news about tainted food imports from China underscore that reality.
But federal farm programs also have tremendous economic impacts on Minnesota, pouring money into local (especially outstate) communities that ultimately pays wages, buys equipment and supplies, and helps keep small towns afloat.
Minnesota's cut
With about 80,000 farms in Minnesota, more than $1 billion in federal subsidies were paid in 2003-04, going primarily to corn, soybean and wheat producers.
The payments and policies established by the farm bill also affect food costs. One need only look to the rising cost of milk as an example, attributed by most to the skyrocketing price of corn due to ethanol production spurred by the federal energy bill.
Prices for beef, chicken, sweetened and processed foods, and anything else that uses corn as a significant input will likely increase as a result of this attempt to bolster energy production from farmland.
Critics of current farm policy are quick to point out that commodity subsidies distort markets and often end up in the pockets of wealthy agribusiness operators rather than helping small farmers.
Subsidies make it possible to profitably grow corn in amounts far in excess of market demand, at least until last fall's energy bill created incentives for ethanol that doubled corn prices.
Without those subsidies other crops — or perhaps no crops at all — would be planted and we'd have less high-fructose corn syrup to fatten our children on.
And who gets the lion's share of the subsidies? Three-quarters of farms in Minnesota report less than $100,000 in annual sales and 48 percent are less than $10,000.
But half of Minnesota farmers receiving the largest subsidies have sales in excess of $500,000 a year, and most of the subsidy payments go to the top 10 percent of farms, with an average payment of $46,000.
The bottom 80 percent averages just $3,630. Our tax dollars are going primarily to subsidize the largest producers of the least-needed commodity crops, corn and soybeans, rather than helping the small farmers who produce food for local consumption and employ thousands of our neighbors.
House bill
The House bill includes some limited attempts at reform, but the agribusiness lobby succeeded in reducing most of them to tokens.
Modest cuts were made to the overall commodity support system from the 2002 bill, but loopholes allowing nonfarmer investors to reap massive subsidy payments were left intact.
An income cap of $1 million was established for subsidy eligibility, though the Bush administration and a bipartisan group of reformers called for a more reasonable $200,000 limit.
Our tax dollars will still keep the price of commodities artificially high, still encourage production of unnecessary crops by unsustainable methods, and the bulk of subsidy payments will still end up primarily in the hands of wealthy agribusinesses rather than supporting the small farmers who support our local communities.
The process isn't over yet.
The Senate will take up the farm bill in September, offering another chance for reform. Hopefully they will seize the opportunity to fix the broken subsidy system while maintaining the good things that the farm bill includes — nutrition programs, school lunches, support for conservation and wildlife habitat, energy security investments, and yes, a helping hand to Minnesota farmers when (and if) they need it.
What is your citation for the claim that large chunks of the farm subsidies go to the richest 10% of farmers? (not doubting it, but curious where the figure comes from)
ReplyDeleteThis figure is commonly cited by critics of the commodity payment program. The USDA web site offers more data that you'd ever want to look at, so I'd suggest the Bread.org site which provides simple state-by-state access. In my state of Minnesota, for example, they note that In the years 2003 and 2004, the top 10% of farms in Minnesota receiving commodity payments received 49% of total payments, with an average payment of $46,413, while the bottom 80% of farms receiving commodity payments received 31% of those payments, with an average payment of $3,630. Another good source is the Environmental Working Group which offers an extensive farm subsidy database.
ReplyDelete