Skip to comments.Big Agriculture: The Queen of Corporate Welfare
Posted on 06/11/2012 5:59:43 AM PDT by Kaslin
Tea Party-minded Congressmen and ideological leftists tend to agree that corporate welfare is bad. Hence, conservatives and liberals recently teamed up to oppose adding $40 billion in loan authority to that bastion of crony capitalism, the Export-Import Bank. Unfortunately, the establishment types in both parties combined to push the extra spoils for Ex-Im through to passage.
Now an even bigger corporate welfare bill – the Farm Bill—is moving through Congress, and it’s garnering even broader support.
Every five years, the House and Senate take up a farm bill. The House is still working up details on its version. S.3240, sponsored by Sen. Debbie Stabenow (D-Mich.) is pending in the Senate. Comically misnamed the Agriculture Reform, Food, and Jobs Act, it is terrible.
Stabenow’s bill would dole out subsidies—most of them lasting five years—to numerous slivers of the agriculture sector. It enjoys strong bipartisan support because the plethora of subsidies spews big money into large swaths of the country. The Congressional Budget Office (CBO) estimates this bill will cost taxpayers $969 billion over the next 10 years.
The CBO report goes on to say that the bill will actually save taxpayers $24 billion. Unfortunately, that’s not the case. The CBO is required to use base its analysis on current—severely bloated—federal spending assumptions. Not only that, but Stabenow’s cuts are offset by a new “shallow loss” program that could easily end up costing more than the proposed “cuts” save. As Sen. Jim DeMint (R-S.C.) observes, Stabenow’s bill actually constitutes a massive increase in spending over the 2008 Farm Bill.
“The 2008 Farm Bill was estimated to spend $604.1 billion over 10 years, as calculated by the Congressional Budget Office,” DeMint notes. “The 2012 Farm Bill is estimated to spend $969.2 billion over the next 10 years. That’s a whopping 60 percent increase!”
Another interesting aspect of this bill: The bulk of its spending—more than $750 billion over 10 years—is wrapped up in the Supplemental Nutrition Assistance Program (SNAP), also commonly referred to as the Food Stamp program. So while the Congressional debate may seem to be over agriculture policy, the real issue is how to fix a broken Food Stamp program that has become little more than a massive subsidy for agriculture interests. Although food stamp recipients don’t buy directly from farmers, farmers and the welfare lobby do work together to increase leverage for passage of this bill.
According to The Heritage Foundation’s Rachel Sheffield, “Since 2000, the number of Americans on food stamps has jumped by roughly 260 percent, to 44.7 million in 2011. During that same period, government spending on food stamps nearly quadrupled, to $78 billion last year.” In just the last three years, Food Stamp spending has doubled.
One problem with the program is that the National Restaurant Association is pushing states to let recipients use Food Stamps to purchase prepared foods. Since prepared foods cost more, expanding the program this way adds more pressure for increased spending . The Sioux Falls Argus Leader reports, “The main goal of the nation's food stamp program has been to supplement the buying power of low-income residents when they shop for unprepared foods at grocery stores. But a major restaurant company is lobbying the federal government on the Supplemental Nutrition Assistance Program, federal lobbying records show.” There is no shortage of lobbying interests trying to hop aboard this corporate welfare gravy train.
Another programmatic problem: States have a built-in incentive to bulk up on Food Stamp participants. The more participants they have, the more money they get from the federal government. Many states are ignoring work federal work requirements to pad their assistance rolls, helping drive up Food Stamp spending.
Some of the increased participation can be attributed to the current recession, yet most of the increases can be traced to states and corporate interests seeking a bigger slice of the federal money pie. President Obama heaped Stimulus money on food stamps while also easing eligibility requirements further complicating efforts to reform the program.
On the Senate floor last week, Sen. Jeff Sessions (R-Ala.) added some well-needed perspective when he noted that the Farm Bill would spend $82 billion on food stamps next year, while the feds will spend less than half than--$40 billion—on roads and bridges. The Food Stamp program is in dire need of reform.
I’ve heard from many a farmer that the direct subsidies are their margin. Then this goes up the line to the land banks who loan the money for land and operating credit and this goes up the line to the banks that lend them the money and even the big ag suppliers. Great while its in expansion, but in the last few years it blew up into a bubble IMO bigger than the 70s, and bubbles always burst.
There are farmers and their are ranchers. Both produce the food we eat. Farmers have been receiving subsidies for years. Ranchers annually lose livestock, to various causes. The difference being that ranchers do not enjoy the benefits of subsidies, that increasingly benefit large corporate farm operations.
When I first moved to Western Kansas, I knew it was real farming country. All the TV and radio stations catered to the farmers but something else surprised me.
Just about everyone who wasn’t in the farming business did not care for the farmers. A typical story would be that they complained all the time about the Government while at the same time getting huge government subsidies.
Also that they complained how no one could make a living farming while driving new Cadillacs, Lincolns, and top of the line 4WD pickups.
I actually got to liking them OK as they all were gun enthusiasts and I belonged to a gun club with many of them. One day I brought to the shooting range a strikingly beautiful Argentine Model 98-09 Mauser made by Deutsch Waffen und Munitionsfabriken. It was unfired when I got it and was the finest made rifle I have ever owned.
A couple of them looked it over and read the inscription in German then began laughing and speaking German to each other. I thought it was amazing that these guys families had probably been in America since the 1890s yet they could still speak German fluently.
They need to stop this program and let the free market work, but of course the socialists in both parties will not allow this to happen. Fascism at it’s finest in America.
I believe that when this ends, food will skyrocket to what it actually costs to produce. It is one reason we moved from Seattle to rural central KY last year. This is our first year with a large garden. We expect a so-so crop (plenty of tomatoes, potatoes and zucchini) but we really are getting the soil ready for the winter crop and next year.
We expect growing your own food to become financially beneficial by then, and obviously the quality is better.
Our twelve hens should start laying by August too.
“Ive heard from many a farmer that the direct subsidies are their margin.”
You know that little bridge in Brooklyn, it’s for sale again.
Ever heard of WIC? It is there to supply milk for mothers with very young children. I was at the dairy section of Wal-Mart yesterday and the fairly expensive, flavored non-dairy creamers for coffee had a label that said, “wic approved”.
The whole government welfare thing, from all levels, is a joke. It is coming to a head because they have run out of Other People’s Money.
To compare people who work hard with welfare slugs and parasites is beyond the pale. Show me a company that moves to any city that doesn’t receive some tax benefit. The left invented the term “corporate welfare” to attack any business that got to keep some of their tax money.
It seems the net result of government subsidies to farming over the years has had the predictable effects of.....
socialized stigma against racial minorities.
Fascist collusion between aggricultural-business and government to the detriment of the small family farmer.
Increased government control and regulation.
The international dimension is also important. U.S. farmers sell into global markets. Most of the rest of the world is far more protectionist, and most countries subsidize their famers far more heavily. This is all very much on the table in the long-stalled (probably dead) Doha Round of talks. U.S. agriculture is a dominant player internationally, and we want to keep it that way.
But they don't own them, the LLC Farm business owns them.
They get to use them 24/7/365, but the business owns them, and pays every dime of the costs. Ya see?
I've never known a farmer that owned a lawn tractor or ATV, but I've also never known one that didn't ride the very top of the line of both.
I know lots of farmers and like them, but they work the system like everyone else that owns a business.
You conflate the two. Keeping your tax money is often called a subsidy by liberals, a “cost” to the City or State - but it is not.
If Springfield wants to give a tax break to people who want to film a movie in Springfield it is not a payout of government funds to a movie studio - it is them declining to collect taxes at as high a rate as the law would otherwise dictate - in order to attract the business that otherwise might go to ‘Shelbyville’.
Farmers are paid direct subsidies - not merely given tax breaks. Shame on you for attempting to conflate the two out of intent to deceive or ignorance.
Today we subsidize farmers because they must compete with offshore food producers. However, if we don't preserve our know-how then we could end up with some very deep regrets on down the road.
Every time I read these stories about waste and subsidies I’m convinced ten average American small business owners could in 24 hours take the detail of the federal budget and produce a balanced budget. Instead we spend a billion dollars for Congress, its staff members, and consultants who do nothing more than keep adding to the debt.
The House Republicans elected in 2010 have not balanced the budget even though they have control of spending per the Constitution. If elected Romney isn’t going to balance the budget, he will “tinker” around the edges. The web woven by special interests is too strong.
At this point in time it appears the only way out this out of control spending mess is for a collapse of the entire system and the US government to lose its ability to borrow. The dictator who takes charge will have no choice but to balance the budget.
You best check your stats. It is not a one time deal. Example for my location: IBM moved here and got tax cuts for 10 years, lease on a monstrous building at $1/year for a decade, free new infrastructure to allow traffic flow, and the list goes on.
Don’t get me wrong: I have no problem with across the board cuts all business, but to single out farmers because they are non-union and small, is not a game of cricket.
For the record: the entertainment industry is the most overpaid, overpraised “industry” on the planet. Nice of you to compare the marketers of deviance and depravation to the suppliers of the cheapest and safest food on the planet.
A tax break is a tax break.
A subsidy is a subsidy.
They are two different things.
Despite your shameful attempt to conflate them.
You are forgetting that we only have the House, and to get the results we want we need the entire Congress, which is the House and the Senate
April 23, 2009 was the last time that the democRat controlled Senate has passed a budget.
Taxpayer funds are taxpayer funds: I don’t care what name you put on them. The tiny fraction farmers get is a pittance compared to most. Keep in mind Ag infrastructure value is in the trillions and use your calculator. There are more than 2 million farms in the country encompassing a land mass of more than a billion acres.
The dirty little secret are all the “farmers” who live large in urban America on the government payments from the fallow farmland that they own in rural America. The payments for the fallow land are large enough to abandon the farm and move to the city and live. It is bought and sold by people who never intend to farm the land, just own it for the government payments.
Don't get me wrong, as I agree with your overall premise. However, the problem I see with all of this is that the vast majority of the subsidies do not go to small, non union farmers - it is the corporate "farmers" that enjoy the vast majority of them. These might agribusinesses (Monsanto, ADM, ConAgra-to name a few) turn around and use those subsidies to lobby for even more regulation on the small guys designed to force them out and selling to the mega corps.
I have no problem with my neighbors, who are multi generation farmers in this county taking advantage of the laws that were originally intended to help folks like them. I do, however, resent a Monsanto taking them and using them against the true family farmers.
This whole thing should more accurately be called “Government Programs to provide Cheap Food For Cosumers”.
For more than 60 years that’s been it’s objective, and is one of the few government programs that regularly meets it’s objective.
I firmly believe the farm programs destroyed the independent family farm.What we have now are huge corporate agribusinesses in bed with the government.
Instead of paying the real costs of food,people pay a fraction at the store and pay the difference though higher taxes.
Do you think the government owns the money they decline to collect and it is therefore “taxpayer funds” when they decline to collect it?
If someone cannot farm the most productive and fertile land in the world at a profit in one of the most free economies in existence without massive 900 billion SUBSIDIES (not tax breaks - subsidies) - what can be said about them?
The effect of massive government involvement and DIRECT SUBSIDIES to farmers has not been for the benefit of the taxpayer, the consumer or the small family farmer. It is, as with most socialism/fascism a detriment to all but the well connected and wealthy. The government assisted rise of massive agribusiness has been at the detriment of the small family farmer and has practically driven the black family farmer (once a significant percentage) completely out of business - as socialism usually tends to subsidize racism.
Big Ag certainly benefits from these subsidies and is the principal reason they are maintained. Groweres of fruits,
vegetables, and nuts do not receive subsidies so they are
totally subject to market forces as they should be.
If you see a power line crew trimming and chipping trees ask them to drop the chips off at your place. They make great compost and mulch if you know how to use them correctly. I hope you planted fruit + nut trees... a garden can be started in 1-2 years. Trees take longer
How absurd! If a significant percentage of “farmers” only collected government payments for their unfarmed, fallow farmland, there would be a huge food shortage.
A few facts, in case you’re interested (Fyi - I inherited my father’s farm last year - a farm that has been in the family for nearly 100 years, so I’m speaking from experience, NOT snippets that one can read on some obscure website and not bother to research):
- Over 75% of the Farm Bill is for the Food Stamp Program (which in no way benefits me).
- Fewer than 25% of farms produce gross revenues over $50,000 per year.
- The number of farms in this country has declined from 6.8 million in 1935 to around 2 million today - if it was so lucrative (income for no work), wouldn’t the number be increasing, like the number of people receiving food stamps is?
- I receive $95 per acre (taxable) from the government for not farming land that is susceptible to erosion - there are qualifying criteria. This allows the land to become more stable through the development of the root system of the grasses that I am required to plant and maintain throughout the 10 year program (the land cannot just be abandoned, as you suggest), and it reduces (slightly) the amount of tilled farmland, which helps support the crop prices. Incidentally, I could make more by farming the land.
- The best farmland in this area sells for up to $12,000 per acre, but ours is not prime, so let’s say it’s worth $5,000 per acre.
- Ignoring taxes and the cost of equipment and fuel to maintain this land (which are not insignificant), my return on this land is less than 3.0% per year.
- If my goal was to live the easy life on government payments, I could live better by selling the land and investing the money at a higher rate than 3.0%.
Thus, to even suggest that anyone would invest in farmland to abandon it and just receive government payments is illogical and uninformed.
The truth is that people are investing in farmland as a hedge against inflation and as a safety net in case the economy continues to worsen.
Since you are so against any hint of others receiving government assistance, I assume you have given up all of your government support (i.e., tax deductions)???
“Ive heard from many a farmer that the direct subsidies are their margin”
Do you ever ask them why they get their margin for free when the rest of us have to earn it? If so, do they ever respond with anything but some variance on “Farmers are special”?
“It is there to supply milk for mothers with very young children”
Funny, used to be God provided mothers with milk. He stuck it in those things in ladies’ fronts with which since puberty I’ve been endlessly fascinated.
“If a significant percentage of ‘farmers’ only collected government payments for their unfarmed, fallow farmland, there would be a huge food shortage.”
You need to brush up on Keynesian economics. Shortages are the deliberate design of various government programs, since ceteris paribus price goes up when supply goes down. And for some reason that I’ve never been able to understand higher prices are supposed to be good for the economy as a whole because they’re good for a certain politically connected block of producers.
“Since you are so against any hint of others receiving government assistance, I assume you have given up all of your government support (i.e., tax deductions)???”
We may not like how the state attempts social engineering through the tax code, and in a perfect world the laws would apply equally. However, tax deductions are not “government support.” Even if the next guy doesn’t get the same break, all that’s happening is you’re keeping more of your own money. That’s self-support.
“I believe that we need to consider agriculture a little like national defense, and not be too concerned about providing the assurance that our nation preserves the ability to grow its own food.”
That only makes sense, as all protectionist arguments are the same, even if for particular special industries they tack on foofaraw about how we have to pay extra in case the Nazis rise again and invade us out of the blue.
“For the record: the entertainment industry is the most overpaid, overpraised industry on the planet. Nice of you to compare the marketers of deviance and depravation to the suppliers of the cheapest and safest food on the planet.”
I would like everyone to notice how protectionists always drop the economic argument as soon as possible, and even legalistic and political arguments, in favor of irrelevant moralistic nonsense. This makes it so that I can never really tell what they’re getting at, and eventually must content myself with the explanation that farmers or whoever happens to be sucking at the teet is special and I should lay off just ‘cause.
The new fashion of govt help is subsidized crop insurance. When you take the risk out of an enterprise like we did with housing, it changes thing drastically. The insurance subsidy is what has driven up the costs of rent and inputs.
The new fashion of govt help is subsidized crop insurance. When you take the risk out of an enterprise like we did with housing, it changes thing drastically. The insurance subsidy is what has driven up the costs of rent and inputs.
Actually I do a little of both to a certain extent, I don’t claim to be an expert I only own the land, but I’m quite certain without subsidies we would see a depression in farm country of epic proportions.
Nope. One of my tenant farmers for my little plot farms thousands of acres with his family. One day we were out looking at some land and earlier in the day he heard a rumor about the subsidies being cut and he went on a rant. The man has never voted D in his life but he was all for cutting the Iraq war completely so the government could spend the money on farmers. So I concluded that subsidy means alot to his operation.
I get the FSA propaganda sent to me and its all jargon that does nothing but make me mad. Especially that nonsense about giving special deals to the usual suspects.
Are you saying that the government no longer pays farmers to not grow crops on certain portions of their land???
60 Minutes had a story on it a few years back. Apparently some of the land that qualifies for these government payments as long as they remain fallow were grandfathered in years ago by the DOA and are paid as long as no crops are grown on them. People in New York were buying up these plots as investments.
One farmer sold to an investor in New York a section of land that had been so grandfathered in. He grew crops all around it, assuring that it remained fallow so that the investor/owner could collect his government payments.
“The man has never voted D in his life but he was all for cutting the Iraq war completely so the government could spend the money on farmers”
Can we cut Iraq funding completely so the government can allow the money to go where it otherwise would have gone. Those people can then spend it as they so choose, on homegrown food or otherwise, and farmers can live and die on the market like every other unspecial industry.
“So I concluded that subsidy means alot to his operation.”
By which I infer the argument is that subsidies are somehow especially important to farmers, since we don’t extend the same courtesy to all other industries. So, no, the argument isn’t anything other than “Farmers are special.”
Do they realize, I wonder, how lucky they are that at one point they controlled an important voting block, happened to be an important component of the populist and progressive movements which led directly to the New Deal, and managed to get their subsidies set in stone during the crisis of the Great Depression? Gosh, how lucky. So we screw bondholders to fund auto unions, fight wars for oil, and bless steel as necessary for national defense. But no industry is so tucked in at the teet of government as farming, and all because a century or so ago they were in the right placer at the right time.
Oh, also because in the general public’s mind tyhey’re still Ma and Pa pulling wooden plows behind oxen on the prairie, fighting cattle barons and Pinkerton agents, or whatever.
“You are forgetting that we only have the House, and to get the results we want we need the entire Congress . . .”
Per the Constitution, all spending bills originate in the House. If a spending bill does not pass the House, the fund are not appropriated and cannot be spent. The Republicans in the House have the choice of not sending bills to the Senate to fund specific agencies or programs. The Senate and President cannot force the House to send the Senate a spending bill. Therefore, the Constitution allows the House, on its own, to defund agencies.
Unfortunately Mr. Boehner and the House Republicans have acquiesced to the Democrat budget games by agreeing to pass continuing resolutions preserving spending at current levels plus a % increase. They abdicated their Constitutional responsibility to send individual spending bills to the Senate for approval. They surrendered to Obama and Harry Reid instead of putting up a fight by sending to the Senate for a vote spending bills with real cuts.
I do have a difficult time understanding why people feel Romney will be fiscally responsible. I clearly recall George W. Bush couldn’t find his veto pen when he had a Republican House spending $500 million for bridges to nowhere, huge increases in education spending, and a Medicare prescription drug program. The national debt doubled on Mr. Bush’s watch. Romney’s record as Governor of Massachusetts was similar to Bush’s record as President he significantly increased the debt. It is hard for me to conceive why Mr. Romney, a liberal Republican, would be any more fiscally prudent than George W. Bush a purported conservative Republican. Based on the behavior of the last two years it is hard for me to believe the House Republicans will suddenly start reigning in spending when they’ve had the power not to spend for almost two years. Given a Republican controlled Senate will include personalities such as John McCain, Susan Collins, Lisa Murkowski, Thad Cochran, Lamar Alexander, and Charles Grassley I have little hope of a Republican Senate led by Mitch McConnell being hard nosed on spending.
Vilifying the productive is a leftist trick. The economic argument if you want: how bout halving entitlements. Entitlements are busting economies aaround the world, not business subsidies.
“Also that they complained how no one could make a living farming while driving new Cadillacs, Lincolns...”
Things haven’t changed a bit. I grew up in Iowa and in the 50’s that was still true...during the depression FDR’s Secretary of Agriculture (and later, VP), Henry Wallace, an Iowa boy, was responsible for initiating a lot of what is still wrong with agriculture today.
Don’t lose sight of the fact that the Farm Bill also sets research agendas for the next 5 year period, including biofuels research and subsidies. The USDA increased its emphasis in biofuels as a means of maintaining “relevance” and increasing funding. The farm bill helps to set research agendas not only for appropriated USDA funds, but also for University researchers which compete for taxpayer dollars based on agendas outlined in the Farm Bill.
As a nation blessed by abundant energy resources, we are wasting hundreds of millions of dollars chasing grass as a source of fuel. What a joke.
We are borrowing 1/3 of every dollar spent, and can’t find anything to cut in the budget? Let me help.
Doesn’t look like you are going to have to worry about that any time soon. The new farm bill touted as a money saver is according to some economists expected to add to the present subsidies a cool trillion over ten years, thus not saving a dime.
No one who is in their right mind, is going to argue the point that food isn’t a pretty important commodity, and we are feeding more with fewer farmers. A shortage of fuel, parts, seed, chemicals, desire, or a catastrophic weather event could place the world at risk. We have not had such since the dirty thirties.
Last I heard the deficit is 40% of every dollar spent by the federal government.