AFF Sentinel Vol.5#20-Circling
Like college kids who refused to get serious about
a big paper until the last weekend, the Farm Bill conferees are making more
progress after the bill was overdue than they did in the years they had to
craft it. The difference is, the college students do have to turn their papers
in, while Congress just keeps extending their own deadline.
More fascinating is the circling back to subsidy
reform concepts hotly debated on the floor of both Houses but left out of the
versions passed. Not enough Congressmen wanted to be the ones eliminating or
cutting back on crop subsidies so they largely ignored them. Now, President
Bush is holding their feet to the fire on subsidy reform he's called for all
along.
For free marketers, direct payment subsidies to
producers -- regardless of commodity prices - is something that needs cutting
or phasing out. It is against free market principles and it often creates
oversupply and low prices for grain farmers. Even livestock producers, while
often benefiting from low feed costs in the past, frequently battled meat
oversupplies and lower prices because of lower feed costs. Even ethanol aside,
world demand alone will provide the opportunity for expanded crop production at
profitable prices in the foreseeable future.
With the President hinting veto and food and fuel
prices rising, the conferees find themselves discussing several approaches to
some reform, either by cutting off subsidies to farmers above certain income
levels or by eliminating subsidies to people with substantial off-farm income.
But southern cotton and rice farmers, often the receivers of large subsidies,
are not happy with the farm income discussions.
Media and political attention has been focused on
a small percentage of celebrities or large farmers who have received subsidies.
That was the sum and substance of much of the Congressional floor debate. Even
President Bush jumped on that bandwagon this week, talking about
multimillionaire farmers getting subsidies when taxpayers are hurting from
higher food prices. That obscures the real issue: do we want taxpayers
to subsidize farmers or not? Who gets the subsidies - playing class warfare one
pundit put it - is beside the point.
Paying people not to raise crops when supplies are
short and prices high is the other spin in Washington. They're coming at the
Conservation Reserve -- really designed to prevent reoccurrences of the Dust
Bowl days while simultaneously taking land out of production and lessen supply
surpluses - from a different angle.
There really are two questions here. One, is
conservation the proper use of government authority and taxpayer's money or
should that be up to private companies and individuals? Could we see the Dust
Bowl days again if government does not make sure we have substantial green
belts in the country? Is that different than holding land in national parks?
Will the decade-long drought predicted for the Southwest test our conservation
preparation as it is?
The second question is whether taxpayer money
should be used to cut commodity production?
With the economy soft and expenses most taxpayers
feel, like fuel and food, on politician's minds, a new uncomfortable comparison
is being discussed in Washington. Trying to stop the expansion of government
funded health insurance, President Bush last year twice vetoed bills that would
have extended government children's health care coverage (SCHIP) to families in
the $80,000/year income range.
Yet Politico.com's David Rogers pointed out that
the White House is proposing cutting off farm subsidies to anyone with an
adjusted gross income (AGI) after deductions over $500,000, ("Farm Bill
Must Clear Income Hurdle," politico.com, 05/01/08). Conferees, while
moving that direction on off-farm individuals, discussed a plan that would not
begin phasing out direct payments to farmers until AGI of $950,000. Please
note, while they term them "non- farm" taxpayers, we used the term
off-farm. People who invest in farms, especially family farm members, should
not be treated differently from anyone investing in oil, telephone companies or
auto companies.
So while Washington wrestles with voter food price
discontent, large-scale cotton and rice producer fears and the SCHIP vetoes,
farmers get over $5 billion in direct payments, regardless of market prices. That's
not a "safety net."
Votes will be tallied and considered. Rogers noted
that of two million taxpayers who filed a Schedule F reporting farm income or
loss, only 71,800 or 3.6 percent exceeded the $200,000 AGI the White House
proposed as a limit last year.
Look for more extensions but more shifting and,
maybe, reform. Email your comments to the author {mos_sb_discuss:08}
|