Wednesday, May 26, 2010

Federal Farm Aid Freebies

Photo courtesy of Aunt Owwee's photostream

Two or three years ago, I looked up the farm subsidies for my county, which is an economically poor county having high rates of unemployment and a low standard of living. There were several listed subsidies of over a quarter of a million dollars, and lots more of lesser amounts. Since I'm a newcomer and have no history here, I asked my retired farmer-neighbor about the recipients. He said those folks used to have local dairies and are now paid not to have them.

Frankly, reading the Farm Bill is a nightmare in confusion. However there is a database recently released by the United States Department of Agriculture, and it includes about 358,000 beneficiaries who received $9.8 billion in crop subsidy benefits between 2003 and 2005.

The database reveals
almost three quarters of farm subsidies go to the richest 10% of American farmers, and that the cost to the average American family was over $400 a year! (note: 10% of the richest 'farmers' includes those that are BigAg.) Click here to view the list.

Here are the stats for my state (Virginia) from the above list:

$1.12 billion in subsidies 1995-2006.
• Virginia ranking: 31 of 50

• 81 percent of all farmers and ranchers do not collect government subsidy payments in Virginia, according to USDA.

• Among subsidy recipients, ten percent collected 84 percent of all subsidies amounting to $937 million over 12 years.

• Recipients in the top 10% averaged $13,559 in annual payments between 1995 and 2006. The bottom 80 percent of the recipients saw only $153 on average per year.

Here are some notes I copied about Farm Aid from another blog.
(note: I did not copy all the post, click here for details)

"The proceeds of foreign aid programs are used by increasingly-despotic governments to repress their own citizens and buy more weapons from US manufacturers. The resentment that foreigners feel towards the US government for destroying their local economies – not to mention their personal liberties – emerges as anti-American rhetoric; the US government then inflates fears of terrorism, and further attacks its citizens to pay for additional "defense."

Since they cannot profitably grow and sell "legitimate" crops, farmers in the Third World turn to the production of marijuana, heroin and other illegal drugs. This drives the price of drugs down in the United States, causing increased consumption, which then further allows the government to attack its citizens on the grounds of the endless "war on (some) drugs" – as well as attack foreigners – by napalming poppy fields, overturning governments, or straight-on invasions.


The take-home message here is just as it always is when one examines the results of government intervention in the free market: money for those who don’t need it, violence for those who don’t deserve it, and more power for those who shouldn’t have it, all financed with tax dollars. Ironically, whenever this type of gubmint waste is identified, the response is almost always a hue and cry for more gubmint waste, via oversight, regulation, enforcement, etc.

If a program with specious pedigree – like farm subsidies – can be depended upon to result in people like Texas oil billionaire Lee Bass and former NBA star Scottie Pippen getting a subsidy, the problem isn’t lack of oversight. The problem is that the program exists at all.

Paying a farmer to not grow/grow a crop – outside the "pull" of the market – was stupid the first time some lobbyist thought of it."

From what I remember from my school days, it was during the Great Depression that US farm subsidies began, and part of President Roosevelt's New Deal, but I don't remember any details. At any rate, I'd bet what the federal subsidies are today is far from the original intent.

I did find this:
Nearly 1/3 ($51.3 billion) of total farm payments from 1995-2005 went to corn, the most prolific US crop. (That seems an unlikely candidate needing public support.) Corn causes significant environmental damage in the growing phase, and more than half the US corn production is used as feed for CAFO's (Concentrated Animal Feeding Operations), an industry whose environmental and social depredations are breathtaking.

Added after I wrote the above: Jim Hightower (author), in Thieves in High Places, provides the classic example in billionaire stockbroker Charles R Schwab, the proud owner of Casa de Patos: "1,500 acres of picturesque wetlands in Northern California." Schwab grows rice on the land, not for harvesting purposes but because the rice attracts ducks. Schwab is one of those rich folks who likes to invite friends and clients to go duck hunting.

So Schwab has no intent to harvest the rice, but that doesn't prevent this man with an estimated $4.7 billion net worth from collecting $500,000/year in federal farm subsidies because he does not market the rice. (Data from here:

It's now the time of the year when the next year's Farm Bill is being drafted. We'll need to print more fiat money.

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