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Jewish World Review
Feb. 17, 2011
13 Adar I, 5771
Pruning Farm Subsidies
Victor Davis Hanson
In times of massive deficits, why are we borrowing millions to subsidize profitable agribusiness? Lots of presidents have asked that question. George H.W. Bush tried to cut farm subsidies in the late 1980s. Bill Clinton did, too. George W. Bush wanted them ended as well. All failed.
The so-called 1996 "Freedom to Farm Act" was supposed to stop farm supports for good, by offering the carrot of extending crop payouts to growers, regardless of current commodity prices, in exchange for ending the flow of federal money altogether after a slow weaning-off period of seven years. But when it came time to honor the agreement, suddenly a new rationale appeared -- that of post-9/11 security. So crop subsidies reappeared under the "Farm Security and Rural Investment Act of 2002," on the dubious premise that in a new terrorist climate, Americans needed to ensure the prosperity of agribusiness. "Investment" in today's bureaucratese, remember, translates into the government borrowing more money to distribute to special interests.
When worries about national security gradually died down, and when it was clear that agribusiness would not end subsides as promised over a seven-year period, a new justification arose: providing fuel for an energy-strapped America under the "Food Conservation and Energy Act of 2008" -- a $288 billion, five-year agricultural bill. Supposedly farmers now needed massive crop subsidies largely to ensure our independence from foreign oil producers and sky-high gas prices.
Even presidents cannot stop Congress from passing these unnecessary federal farm bills, because they are brilliantly, if not cynically, conceived. Such federal support always utilizes the current crisis of the day -- whether promises to cut the deficit, protect the country or provide new energy.
Two disparate special interests push massive federal agricultural subsidies. Agribusiness wants lots of government support money; the entitlement industry wants more food stamps and rural entitlement programs. Combine them, and we spend billions more each year to subsidize both constituents. Who can stop a bill pushed through by Kansas conservatives and Chicago community organizers -- especially when multiyear farm legislation always seems to start at or near national election time? What politician wants to go on record against rural "family farmers" or the urban "needy"?
But 2012 is finally the time to end the crop-subsidy business, with the annual budget deficit approaching $1.5 trillion in 2011, farmers receiving record prices on the open market, and the new conservative House of Representatives having been elected on the promise of fiscal responsibility.
Corn reserves are at their lowest point in 15 years, as prices skyrocketed nearly 70 percent in almost one year. Escalating world wheat prices have caused unrest in the Middle East. Soy, dairy and meat prices are likewise reaching record levels. In other words, a growing world population, increased affluence abroad and demands for higher-priced meats and vegetables, and diversion of prime cropland for biofuel from Europe to Brazil -- in perfect-storm fashion -- have made food a lucrative business.
We need a drastic reset of agricultural policy. The use of prime ag land to grow corn varieties for ethanol biofuel makes no sense. Why divert farmland for fuels when the world's poor are short of food, and there are millions of un-farmable areas in Alaska and the arid West, as well as off the American coast, that are either not being tapped for more efficient gas and oil or are only partially exploited?
When North Americans do not fully utilize their own fossil-fuel resources, two very bad things usually follow: one, someone else in Africa, Asia or Russia is far more likely to harm the environment to provide us oil; two, precious farmland will be diverted to growing less-efficient biofuels instead of food -- and billions worldwide pay the price.
No supporter has ever been able to explain why the advent of massive subsidies over the last half-century coincided with the decline, not the renaissance, of "family farmers." Nor has anyone offered reasons why cotton, wheat, soy, sugar and corn are directly subsidized, but not, for example, nuts, peaches or carrots.
Finally, the United States is supposed to be the world's premier free-market economy, based on the principles that competition is good, and that entrepreneurs freely reacting to markets create more wealth when unfettered by government red tape. Why, then, would the conservative agribusiness community want government intrusion that warps world food markets, ends up hurting the global poor, and contributes to an unsustainable national debt?
In the next few years, conservatives are going to have to cut entitlements and social spending. To retain their credibility, they must apply the same standards of fiscal responsibility to agribusiness that they will have to apply to other areas.
Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.
Victor Davis Hanson, a classicist and military historian, is a senior fellow at the Hoover Institution and a recipient of the 2007 National Humanities Medal. Comment by clicking here.
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