An exclusive column penned for the FlashReport by U.S. Representative Edward Royce.
On Thursday, Congress overrode a President's veto and passed the 2008 farm bill, continuing one of Washington's more regrettable traditions. This year's legislation contains $25 billion in agricultural subsidies which will go to protecting farmers, often through direct payments, from lower crop prices. This 75 year old tradition has developed into America's largest corporate welfare program and it needs to end. Hundreds of billions of dollars have been spent sending checks to farmers over the years leaving the American taxpayers with the bill and, at the same time, hampering our trade relations throughout the world.
When President Franklin D. Roosevelt first introduced agricultural subsidies, America's farming industry was struggling through the Dust Bowl and the Great Depression. Initially the subsidies were going to help a large portion of the population who was disproportionately struggling economically. At that time, 25 percent of the country was living on 6 million farms and farm incomes were just half of the national average. But as you know, those days have long passed. Today farmers make up just 1 percent of the population and have an average income of nearly double that of other Americans. While the proponents of these subsidies would like us to believe they are still helping those small struggling family farms; in reality, the majority of the taxpayer money is going to a group of profitable business conglomerates dominating the industry. The wealthiest 10 percent of farmers take in 75 percent of the subsidies and the average farm subsidy recipient makes $200,000 in income and has a net worth of about $2 million. Clearly the $25 billion in subsidies is headed toward an industry doing very well for itself. According to the U.S. Department of Agriculture, net farm income will hit $92.3 billion this year, up 56 percent from just two years ago.
Aside from the cost to American taxpayers, subsidizing this profitable industry has taken its toll on our trade relations. Because we export tens of billions of dollars worth of farm products around the world every year, we work with the World Trade Organization (WTO) to ensure markets remain open and new markets emerge. After seven years of negotiating, these Doha Round talks have hit an impasse, in large part, because of subsidies developed countries (like the U.S. and Europe) continue to feed their farm industries. Poorer developing countries are particularly hard hit by our subsidies which have distorted the worldwide marketplace for these products. The subsidies enable farmers to sell their products often times at or below the cost of production, giving them the upper hand against products of farmers in developing countries. Martin Khor, director of the Third World Network, called U.S. farm subsidies paired with those of Europe and Japan, "the main cause of the greatest distortion in world trade."
Unfortunately, Mr. Khor's words were not enough to overrun the efforts of the U.S. farming industry. You may be wondering how the farm bill, packed with giveaways to a small number of farmers, gained the support of such an overwhelming number of my colleagues. In addition to handouts to the farmers, the bill passed last week sends billions of dollars toward social programs like food stamps and school lunches (among others) in an effort to appease the members of Congress whose constituencies did not receive the subsidies.
When they were first introduced, the Secretary of Agriculture under Roosevelt, Henry Wallace, declared the subsidies "a temporary solution to deal with an emergency." Clearly they have achieved their initial purpose. There is no need to continue subsidizing this group of farmers. Not addressing these subsidies is simply bad government and it is unreasonable to ask the American taxpayers to continue to pay for them. This is why I have introduced legislation which will immediately end the distribution of all farm subsidies. I am hoping my colleagues will join me in this effort to end an absurd policy which has cost the government hundreds of billions of dollars and strained our trade relations for far too long.
