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Monday, October 24, 2005

Wolfowitz: Cut farm subsidies

Posted by: Hammer / 10:44 AM

The Guardian reports that Paul ("Iraq can finance its own reconstruction") Wolfowitz, head of the World Bank, is calling for an end to farm subsidies:

Mr Wolfowitz said it was not morally justifiable for rich countries to spend $280bn (£158bn) - nearly the total gross domestic product of Africa and four times the total amount of foreign aid - on support for agricultural producers.

The current round of WTO talks stalled in Geneva after wealthy countries failed to reach an agreement on lowering domestic agriculture subsidies and tariffs earlier this month.

The Heritage Foundation has also made a case for cutting farm subsidies:

This year, lawmakers will spend more money on corporate welfare than on homeland security, and America’s largest corporate welfare program is farm subsidies. Despite rhetoric about aiding struggling family farmers, subsidy formulas are deliberately written to bypass most family farmers and instead lavish millions on large agribusinesses.

Two-thirds of all farm subsidies are distributed to the wealthiest 10 percent of farmers. The U.S. Department of Agriculture reports that farmers on "large" and "very large" farms -- the types that receive the bulk of the subsidies -- report an aver­age household income of more than $135,000.[7] Are these the "poor family farmers" lawmakers are talking about?

It gets worse: 78 farms received over $1 million in subsidies in 2002. The $110 million received by Riceland Foods that year was more than Washing­ton gave to every farmer in 12 states combined. Not to be outdone, a dozen Fortune 500 companies -- including John Hancock Mutual Life Insurance, Westvaco, Chevron, and Caterpillar -- have pocketed farm subsidies as much as 510 times larger than the amount received by the median farmer. Farm subsidy checks are also sent to celebrity "hobby farmers" such as David Rockefeller, Ted Turner, Scottie Pippen, and former Enron CEO Ken Lay.

Likewise, the Cato Institute reports that farm subsidies have doubled since 1998 to over $20 billion per year.

In sum: farm subsidies disproportionately benefit the wealthy and harm the world's poorest. While farmers are typically hardworking, honest, reliable people, they do not deserve to be mythologized above other vocations, no matter what Rolvaag and Steinbeck have to say.

But then, the last time Wolfowitz, Heritage, and Cato agreed on something, we ended up losing thousands of lives and spending hundreds of billions of dollars to bring chaos to Iraq.


Q: How does a farmer double his income?

A: He gets another mailbox.

When I bought an acreage a couple years ago, I kept getting mail from the local Farm Service office. I was eligible for payments since my land was capable of growing a certain quantity of listed crops. When I told them I had no intention of planting anything, they said it didn't matter - I could get the annual payment regardless (I would have to pay it back if the commodity price rose above a certain level, however.)

I said no thanks. (I'm no hero - the payment was < $500)

By Blogger Captain Liberty, at 11:20 AM  

Here's me sounding like a conservative free marketeer again. The government subsidy system has wholly messed up the way we produce food in this country. We're a high fructose corn syrup nation and we're paying for it.

By Blogger Hammer, at 11:37 AM  

That is pretty amazing. Maybe you could chose to not grow something with a higher subsidy. It's like the old joke about the guy who ran to work behind a bus because it saved him the $1.25 bus fare. His friend told him he should run to work behind a cab instead and save $20.

By Blogger Jambo, at 12:13 PM  

As a former farm-boy, I better speak up here. Yeah, the big conglomerates get massive $$ off the subsidies - but a lot of the little guys (and they are still the majority of farmers) often need them to survive. The costs of production (especially fuel) are far above prices for most farm commodities. My cousin is getting as much for wheat now as my Dad did when I was in high school. Hell, if you count the skyrocket prices we got during the Russian wheat deal, he's making about half that. The problem (and I am sure that Bush will deal with this because he's all about helping the little guy) is the price of commodities in this country are far less than what farmers in Europe, Canada, and South America get. And until the inequity is addressed, the Congressmen from farm states will continue to fight for subsidies.
Granted, there are many stupid loopholes as Captain Liberty points out. But most farmers getting those types of payments are under a crushing load of debt. Walk into any farming community, find the local cafe, and check the bulletin board. Start counting the auctions. Far too many farmers leaving the land, only to be usurped by conglomerates that will pocket millions of subsidies. But as I said, I am sure Bush will address this. Hell, he might even appoint Brownie to take care of it. That guy just does a helluva job.

By Anonymous Jerjo of Adderall, at 1:00 PM  

European farmers get enormous subsidies. I think Wolfowitz is more concerned with the EU subsidies than the US subsidies.

I'd much rather have family farms than conglomerates. Family farmers are much better stewards of the land. I suspect they are more productive, as well. Sadly, our subsidy system is tilted against them.

By Blogger Hammer, at 2:55 PM  

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