Agricultural subsidies take from poor, give to rich
Kennebec Journal, November 9, 2007

If there is any principle of economic justice that free-market conservatives and egalitarian liberals should agree on, it's this: It is always wrong for the government to tax the poor to subsidize the rich.

That, unfortunately, is exactly what America's farm policy does, and that is what it is going to keep doing if the U.S. Senate approves a new farm subsidy bill such as the one endorsed in July by the House of Representatives.

In recent years, the United States has been dishing out about $25 billion per year in subsidies to farmers -- at a time when farmers, as a whole, are doing very well. According to the Department of Agriculture, the average farming household has an income of $81,420 -- almost 30 percent higher than the average American family's income, and the average farming household has more than twice as much wealth (more than $800,000) as the average American household.

Even if farm subsidy payments were distributed equally among all farming households, they would amount to an unfair taking of funds from the poor in order to give it to the rich.

But America's farm policy is far more perversely redistributive than that because the subsidies our tax dollars support go disproportionately to the richest farmers -- in effect, to large agribusinesses. The top 5 percent of recipients get nearly half of the subsidies, while the bottom four-fifths receive less than one-fifth of the available funding.

If the only thing wrong with the farm bill were that it took from the poor to give to the rich, it would rank high among our nation's most perverse public policies.

But there's more.

Not only does our policy unfairly subsidize wealthy farmers, it particularly subsidizes a few commodity crops at the expense of other agricultural products. The five big crops -- wheat, cotton, corn, soybeans and rice -- rake in 90 percent of the subsidies.

Thus we subsidize the manufacture of such things as high-fructose corn syrup and hydrogenated vegetable oils, in the process lowering the price of all those "junk food" snacks parents are supposed to discourage their kids from eating.

Meanwhile, healthy snacks such as fresh fruits and vegetables, being unsubsidized, are made relatively more expensive.

But wait -- there's still more. Our agricultural subsidies also distort international trade and the World Trade Organization has repeatedly said they are illegal. Given that we complain when our trading partners fail to comply with their obligations under the WTO, it is only fair that we, too, comply when we are required to.

Apart from the unfairness involved in not following rules we demand that others live by, our agricultural commodity subsidies impose real harm on very poor farmers in the developing world by artificially depressing the prices they receive for the cotton and other subsidized commodities they produce.

How does such a perversely redistributive, market-corrupting, junk-food-promoting and third-world-economic-development-squelching policy become law?

A brief lesson in American political geography and interest group politics is in order.

Though they are few, the beneficiaries of the farm subsidies are well-organized and care intensely about retaining their government hand-outs. Though many of us are harmed by the subsidies, we don't feel the harm very keenly. That is why there has been political gain in voting for farm subsidies and not much benefit to voting against -- especially for senators representing the big, squarish "farm states" in the middle of the country.

When farm subsidy supporters have faced organized opposition, they have typically responded by larding up the farm bill with new benefits and expenditures, which is why the House farm bill includes support for such things as food stamps and environmental protection.

This year's debate about the farm bill has been better publicized and more intensely fought than those in other years, and there is still some chance that the Senate, which is now considering the issue, will vote for a better farm policy than the House has endorsed.

Sens. Richard Lugar, R-Ind., and Frank Lautenberg, D-N.J., have proposed (and our own Susan Collins has co-sponsored) a measure that would replace farm subsidies for the few with a form of crop insurance that would reach most farmers. That bill would be vastly better than the current policy.

The best course of all, however, would be to end agricultural subsidies entirely. Wealthy farmers are the last people in the world who need to be bought a free lunch on the ordinary taxpayer's dime.