Wednesday, July 25, 2007

Farm Subsidies = Corporate Welfare

From the LA Times via Andrew Sullivan...

[I]f subsidies were really designed to alleviate farmer poverty, then lawmakers could guarantee every full-time farmer an income of 185% of the federal poverty level ($38,203 for a family of four) for under $5 billion annually - one-fifth the current cost of farm subsidies.

Instead, federal farm policies specifically bypass family farmers. Subsidies are paid per acre, so the largest (and most profitable) agribusinesses automatically receive the biggest checks. Consequently, commercial farmers -- who report an average annual income of $200,000 and a net worth of nearly $2 million -- collect the majority of farm subsidies. Fortune 500 companies, celebrity "hobby farmers" and even some members of Congress collect millions of dollars under this program.


bgunzy said...

It all goes back to the following phrase: Cheap Food Policy. If you don't like the fact we are spending so much on ag subsidies, then will you be willing to pay more at the grocery store? Or are you willing to have less safe food? Or more imported from other countries?

The only ones who like subsidies are the ag processors; they can buy low when the market provides it to them, and the government keeps their suppliers (i.e. farmers) from going bankrupt. Listen to the recent howls from processors who are now have to pay nearly a fair price for their inputs because of demand from ethanol!

We farmers would rather make a liveable income off the market than from the government. But as long as America demands "cheap" food, subsidies will be around.

noneed4thneed said...

Cheap food policy has little to do with billions of taxpayer money going to wealthy large corporations while family farms struggle.

bgunzy said...

Cheap Food Policy has EVERYTHING to do with giving subsidies to large corporations, NoNeed.

Let me explain: Two years ago, corn was being priced in the country for around $1.70/bushel. Even with 180 bu/ac corn, this is still below cost of production. So, Uncle Sam gives us farmers what is called an LDP, or Loan Deficiency Payment. On the day we elect to take it, we get the difference between the County Target Price and the Posted County Price (PCP). That has ranged from $0.00 to $0.50/bu recently. Let's say I elected to take the price when it was $0.50/bu. That means the gov't is paying me the difference so I can stay in business. Meanwhile, even if no farmer sells corn at $1.70/bu, agribusiness can contract corn for about that amount (probably $1.85/bu or so) and have cheap corn to feed their hogs, cattle, or make corn flakes out of.

The producer is satisfied for now 'cause he gets to stay in business, as Uncle Sam has made up the difference. The agri processors are happy because they have cheap corn. The taxpayers are ticked off because they foot the difference, thinking the farmers are getting rich. In actuality, they are getting cheap food because the processors are not paying the full price for the crop to sustain production (i.e. cover costs of production).

Furthermore, a "BIG" wealthy corporation gets no more subsidy PER ACRE than a small farm does. My neighbor across the road farms three times as much as I do, but he has about the same subsidy payments per acre as I do. Our direct payments are pretty similar, depending on the historical production of the farmland. He might hit the LDP better than me, or I might have more yield and get more than he does, but we all have about an equal opportunity/shot at it. A big operation gets more payments, but that's because they are risking more, too.

Anytime you want the truth on agriculture, rather than Democratic talking points, let me know.