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    A Times Editorial

    Farms bust the bank

    Politicians are promoting farm subsidies as ''saving the family farm,'' but one senator is suggesting a cheaper alternative that protects farmers while returning to a free market system.


    © St. Petersburg Times
    published January 28, 2002


    Today's welfare queens are farmers, showing up in shiny boots and shiny trucks to collect their federal subsidy checks. At least that is what a reasonable person would conclude after following the debate (lack of debate, really) over the 2002 Farm Bill.

    Both houses and both parties in Congress want to lard the direct payments, price supports and low-cost loans to farmers with billions more, particularly for crops that already produce a wasteful surplus. Despite a return to deficit spending, both the House and Senate would add more than $73-billion to the existing farm bill, more than half of which would go for commodity programs.

    The politicians are promoting such generosity under the guise of saving the family farm and assuring an affordable supply of food. Truth be told, the 2002 Farm Bill actually undermines both efforts.

    The bulk of subsidies go not to family farms but to the largest agribusinesses. For example, in Arkansas' Mississippi Delta region, the rice capital of America, the top 1 percent of farmers get 26 percent of the subsidies while the bottom 80 percent get only 9 percent of the money, the New York Times reported. Paid to overproduce, the farms end up with a surplus of rice, but that is not a beneficial outcome. Low wholesale prices squeeze the family farmers out of business, while large federal subsidies help the corporate farmers buy out their competitors.

    Consumers don't necessarily benefit from overproduction, either. For example, price supports and import restrictions on sugar actually inflate the cost of refined sugar and other products by $2-billion a year.

    The U.S. Department of Agriculture issued a warning earlier this year in an important report on food and agriculture policy. "Many of the program approaches since the 1930s proved not to work well or not at all, produced unexpected or unwanted consequences, became far costlier than expected and have been continually modified in our long succession of farm laws," the report stated.

    Given the adverse effects of such farm policies, why is Congress so intent on busting the bank for farmers? It has little to do with farming and a lot to do with congressional politics in an election year. Sen. Dick Lugar, an Indiana Republican and one of the few sane voices on the issue, explains it this way: "If either party stands in the way of this largess, they risk being labeled the 'antifarm party' and targeted with sentimental imagery associated with farm failures."

    Sen. Lugar has proposed a superior alternative to enlarged subsidies, one that would treat all farmers equally and return the beneficial aspects of free markets to agriculture. His plan would provide every farmer with federal money for income insurance. That way, farmers could grow whatever crop they choose and still be shielded from catastrophic losses in a bad year. Family farmers would be protected from their greatest adversary -- rapacious corporate farms. Such a program would cost taxpayers much less and make America more competitive with foreign agriculture.

    Few in Congress are listening, however. They are too busy "protecting" the family farm and American consumers by handing out billions of dollars to businessmen who never seem to get their hands dirty.

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