Wednesday, June 15, 2011

It's A Grand Harvest Of Subsidies For Farmers

Yesterday the Senate decided to kill the ethanol subsidy 73-27 in a largely symbolic vote, since it's attached it to another bill that's unlikely to pass. This is the type of legislative misdirection that we can expect in a town where doing right is not nearly as important as being seen to 'try' to do right. There will be little publicity when this bi-partisan effort dies an ignominious death in the House. 

Of course the ethanol subsidy is but a paltry $5 billion of the budget. If the Senate wanted to show true bi-partisan effort, they might want to take on the bigger picture. Ethanol after all, is largely a product of corn, one of the many crops which the government pays farmers not to plant. Yes, that's right. Along with Soybeans, Wheat, and Rice, the government pays out some $25 billion per year in subsidies to farmers not to farm. And while this sum is less than 1% of the Federal budget (something that's alarming in and of itself), it is nevertheless a significant amount. 

When you think of it, it's kind of like a special form of unemployment compensation (being paid not to work) for farmers only. And lest we think that this money is the only thing saving the small family farmer, in fact it's commercial farmers making over $170,000 per year that receive a majority of the subsidies (according to the Washington Times). Even the EPA admits that according to its 1997 numbers that "46,000 of the 2 million farms in this country accounted for 50% of the agricultural products"

It's not much of a stretch to assume that a good portion of the subsidies is going to those shrewd enough to be running the largest farms. And all of this, according to the Times, when in the last year: wheat is up 81%, corn 59%, and soybeans 39%. Of course none of this could have anything to do with ethanol, which uses some of these same grains in its production. But heck corporate welfare for corporate farmers who are dangerously close to being in the riches 1% might be a small price to pay if in fact we can use ethanol to decrease the use of imported oil right? Except for the fact (pointed out by the CATO Institute in a posting from some time ago) that if we used all of the corn in this country to produce ethanol, we could displace only about 3.5% of our gasoline consumption. Likewise pointed out in this previous effort, were the facts that:
  • Without government subsidies, ethanol production is currently not a viable energy option economically.
  • Ethanol actually causes more pollution than fossil fuels when that during its production is added into the equation.
  • Ethanol, even as an additive to gasoline, does considerable damage to many of the current internal combustion engines in use today.
Crops being used in what is apparently the wasteful and polluting process of producing a gasoline additive might also be looked at as food taken out of the mouths of starving people if one were so inclined. For as more farmers turn their crops over to ethanol production, and in light of the land being covered with water in spring flooding, food prices for both these grains and the meat products that come from the animals they feed are likely to see an even greater increases than they have in recent years. 

But that's not all! According to a Las Vegas Review Journal article from 2008, the government program of "paying farmers "rent" not to grow row crops -- including corn and soybeans -- on 34 million acres (emphasis added) is now identified as a "conservation" program". Farmers literally enter into a rental contract with the government not to grow crops in buffer zones along streams and rivers for 10 to 15 years in the name of being eco-friendly. Incredibly, some of this payout is not even about farming and exists only as a legacy to the land, as pointed out in a Washington Post article from back in 2006: "Even though Donald R Matthews put his sprawling new residence in the heart of rice country, he is no farmer. He is a 67-year-old asphalt contractor who wanted to build a dream house for his wife of 40 years. Yet under a federal program approved by Congress, his 18-acre suburban lot receives about $1,300 in annual "direct payment" because years ago the land was used to grow rice." And Mr Matthews is not alone! "Mary Anna Hudson, 87, from ... Houston, has received $191,000 over the past decade. For Houston surgeon Jimmy Frank Howell, the total was $490,709." The total for the program in 2006 was $1.3 billion. One can only imagine what the natural increases in such programs has done to these payments in the intervening 5 years. 

Don't get me wrong here, its nice to see any business doing well in this economy, and small family farms have suffered setbacks in years past; but income for farmers has been up in recent years. It seems that now however, with the increase in larger individual farms and Corporate farming, that this occupation has become little more than another bunch of self-serving individuals and greedy businesses that have gotten very good at playing the government lobbying game at the expense of taxpayers. So while they may be planting corn, wheat, soybeans, and rice (or not of course), what they are reaping is in actuality a grand harvest of Government Subsidies ...

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