Farm Subsidies

American politicians are slowly destroying our prosperity by constantly interfering with the free market mechanisms that made our country an economic powerhouse. There’s a good example of how. This Letter to the Editor was published in the Gwinnett Daily Post on November 21, 2001.
— 11/21/01


Terrorist may be destroying people and property, but U.S. politicians are destroying long-term prosperity. They do this by disrupting the market place. Instead of consumers deciding what products and services they want, our money goes to the producer or industry favored by government. This interferes with efficient market mechanisms like supply and demand, and delays economic rebound. Here’s one such example.

In 1996, President Clinton and Congress passed the Federal Agriculture Improvement and Reform Act, otherwise known as the “FAIR Act.” This bill was supposed to dramatically reduce farm subsidies over a seven year period. Unfortunately, everything in Washington works the other way around.

Since 1999, direct subsidies to farmers have soared to more than $20 BILLION per year from an average of $9 BILLION per year in the early 1990s. Each subsidy creates an incentive to overproduce. This increases supply, which depresses price levels. This creates more demand for additional subsidy.

This merry-go-round is peddled by both political parties. In July of this year, President Bush and the 107th Congress passed an emergency $5.5 BILLION farm bill. When you say the word, “emergency,” most people think of floods, drought, hurricanes, etc. According to the USDA, between 1998 and 2000, approximately 80% of all emergency subsidies were used to boost farm incomes when prices fell below artificial thresholds. They were not in response to natural disasters.

Did you know that farm households have higher incomes, on average, than non-farm households? USDA reports that in 1999 the average farm household income was $64,347; while the average non-farm household income was only $54,842.

As if this were not bad enough, more than 90% of these subsidies go to producers of just five crops–wheat, corn, soybeans, rice, and cotton. Producers of vegetables and fruits are at the back of the corporate welfare line.

USDA defines a small farm as one with sales less than $10,000 per year. According to the U. S. General Accounting Office, these farms only receive 14% of the annual farm subsidy. This doesn’t count the $1.5 BILLION every year we pay farmers to look at idle land.

I don’t mean to be disrespectful and apologize if it appears that way. Unfortunately, I can only draw three conclusions. Our federal leaders are incompetent, criminal, or both. It’s time to vote political incumbents out of office. I don’t care which party they’re in.