Big Ag Holds Big Sway in Farm Bill

By
Friday, May 16, 2008 at 8:03 am

Millionaire farmers will continue getting taxpayer subsidies, sugar producers will inherit more government protections and foreign food aid will take a whack under a five-year, $300 billion farm bill approved by the Senate Thursday.


The vote was a sweeping 81 to 15, far beyond the two-thirds majority needed to override the Bush administration’s promised veto. The House approved the same bill Wednesday by a 318 to 106 count, also safely veto-proof. The margins indicate that the bipartisan proposal is almost certain to become law.


Illustration by: Matt Mahurin

Illustration by: Matt Mahurin

Enactment of the enormous bill would mark a rare departure from the legislative stalemate that has otherwise marked the year. Faced with the choice between moving legislation to the right to satisfy the White House or pushing it to next year, Democratic leaders have increasingly picked the latter. That the farm bill is an exception lends testimony to the influence of the agriculture industry over congressional lawmakers — and to the fear among party leaders of losing middle-of-the-country seats in November.


Not insignificant, agribusiness has donated roughly $31 million to Washington lawmakers in the 2008 election cycle alone, according to the Center for Responsive Politics, making it one of the most powerful lobbies in the nation.


Two-thirds of the bill’s funding will go toward popular nutrition programs, like food stamps and healthy-snack programs for low-income students. The remainder will fund crop subsidies, disaster farm-relief, biofuel production and land conservation efforts. Sprinkled throughout the package are numerous regional earmarks, like funding for racehorse owners in Kentucky and salmon farmers in California.


“This bill benefits every American, from our smallest towns to our biggest cities, urban and rural residents, farmers and non-farmers,” Sen. Tom Harkin (D-Iowa), chairman of the Senate Agriculture Committee, said in a statement.


But opponents wonder if some of the beneficiaries need the help. Under the bill, for example, individuals earning up to $750,000 in farm income and $500,000 in non-farm income are eligible for taxpayer subsidies. That means a farming couple could feasibly take in $2.5 million a year and still receive federal assistance.


Critics also point out that farm operators — who number more than 2.1 million — already earn far more than other Americans, with average household incomes estimated to be roughly $90,000 in 2008, according to the Agriculture Department.


“This bill was well designed to avoid every opportunity for serious reform of wasteful, outdated subsidy programs while actually piling on additional layers of unnecessary spending,” Rep. Ron Kind (D-Wis.) said in a statement. “Commodity prices are through the roof and yet we are still funneling billions of dollars to farm households making up to $2.5 million a year in profit.”


Kind, whose district includes a variety of agriculture, was one of just four House Democrats to vote against the bill on Wednesday. Two upper-chamber Democrats, Rhode Island Sens. Sheldon Whitehouse and Jack Reed, also opposed the bill.


Even some bill supporters say the income caps are too kind to big farmers. Chris Peterson, president of the Iowa Farmers Union, said subsidizing wealthier farmers pushes up rents and land prices for everyone else. “It makes life a little more miserable for us little guys,” he said. “Sooner or later, we’re going to have to bite the bullet and get rid of some of these subsidies.”


One controversial provision creates a new program to have the government buy surplus sugar from the marketplace and put it toward ethanol production. Chris Edwards, director of tax policy at the conservative Cato Institute, said that that provision hurts consumers twice: First, when their taxpayer dollars fund the program; and later, when it reduces market supply, thus keeping sugar prices artificially high on the grocery store shelves.


Democratic support for such provisions is puzzling, Edwards said, for it bucks the party’s populist approach. “It’s a reverse Robin Hood scenario — to the Democrats’ shame,” he said, adding that the overall bill is “an abomination.”


The White House agrees, arguing that the proposal is too expensive, too generous to wealthy farmers and relies on budget gimmicks to cover the costs.


“It does not target help for the farmers who really need it,” Agriculture Secretary Ed Schafer said in a statement, “and it increases the size and cost of government while jeopardizing the future of legitimate farm programs by damaging the credibility of farm bills in general.”


The administration also blasted the proposal for continuing to prohibit the U.S. foreign food aid program from buying crops overseas. Aid groups have long-argued that allowing those dollars to purchase food abroad would expedite delivery to the people in need — something the White House supports. Agricultural interests, however, have successfully convinced lawmakers of both parties not to change the rules of the $2.1 billion program.


Another foreign food aid program — the Dole-McGovern International Food for Education program — also took a hit under the new farm bill. That initiative, named for former Sens. Bob Dole (R-Kan.) and George S. McGovern (D-S.D.), encourages low-income kids overseas to attend school by providing them free lunches. Its current budget is roughly $100 million per year, but the new law slashes that figure to about $60 million.


The bill now moves to the president’s desk, where it is expected to be vetoed. If lawmakers successfully override it, as is also expected, it would mark just the second time that Congress has overturned a veto under the Bush administration. (The first instance came last fall, on a water projects bill.)


For congressional opponents, the veto offers one last opportunity to eliminate some of the subsidies and divert the money to needier folks. “At a time when Americans are struggling to pay their mortgage, food and energy bills,” said Rep. Earl Blumenauer (D-Ore.), “we should help people who need it and not lavish resources on people who don’t.”


Blumenhauer shouldn’t hold his breath. There are roughly 31 million reasons why the bill will remain as it stands.

Categories & Tags: Congress|

Comments

1 Comment

peacemakesplenty
Comment posted May 16, 2008 @ 3:51 pm

“One controversial provision creates a new program to have the government buy surplus sugar from the marketplace and put it toward ethanol production. Chris Edwards, director of tax policy at the conservative Cato Institute, said that that provision hurts consumers twice: First, when their taxpayer dollars fund the program; and later, when it reduces market supply, thus keeping sugar prices artificially high on the grocery store shelves.”

Actually, from the economic angle, this is one of the main benefits of biofuel production – farmers can take excess crops from the market, convert them to ethanol, and thus not be stuck with crops the market doesn’t want. From the farmer’s end, such flexibility allows one to survive the changing picture of demand and supply – this is “diversification” at the farmer’s end.

If diversification is good for investment, why isn’t it also good for farmers?

However, the subsidies for exports should be banned, period. That is a great dishonest scam that does as much economic damage abroad as it does at home. Instead, we should focus on subsidies for low-energy food production (solar and wind and electric motor-based farm equipment), as well for water- and fertilizer-efficient farming practices that use minimal amounts of pesticides and herbicides.

The biofuel subsidies are very defendable – the U.S. has always subsidized fledgling technology startups using taxpayer dollars – that is the number one theme in U.S. academic universities today, and is actually out of control – pharmaceuticals, electronics, military contracts, financial studies – there are huge taxpayer subsidies for these industries that go unremarked on, or are defended as classic examples of public-private partnerships that do wonderful things for the economy.

The fact is, the fossil fuel industry and their financial controllers are realizing that if biofuels , electric cars and fuel efficiency take off, their petroleum markets will shrink to almost nothing – so they are trying every trick in the book to halt it, but that now seems very unlikely. Thus, it’s bye bye, dinosaurs – evolve or fossilize.


RSS feed for comments on this post.

Sorry, the comment form is closed at this time.