The Boston Herald | September 23, 2001 | Editorial
Having produced a devastating analysis of the harm done by crop subsidies, the Bush administration is being cagey about what comes next. It would be smart to give the widest possible publicity to the document.
That would spread the message that most government farm aid goes to the well-off. Direct crop subsidies were supposed to have been abolished in 1996. But there hasn't been a year since that Congress hasn't passed them around. Last year they cost $ 27 billion, even though they are largely confined to corn, wheat, soybeans, rice and cotton. (This isn't the total cost to the economy because for other commodities, government-imposed price or import controls, as on milk, raise the price to consumers.)
Almost two-thirds of the money went to about 10 percent of the farmers. More than half the nation's food is produced by 175,000 farms, only 8 percent of the total but containing about a third of the country's agricultural acreage. Family income on these farms averages $ 135,000 per year.
Since subsidies are not based on need, the most prosperous farmers can use them to expand. This drives up land prices and helps squeeze out the borderline farmer. It also makes it harder for sons and daughters to buy out their parents.
The department's report took no position on the 10-year farm bill now making its way through the House. It would authorize $ 170 billion in subsidies over that period, including more for grain and cotton farmers. But the report did say the nation should be devoting more funds to conservation, pest control, protection from food-borne diseases and nutrition education, topics expected to get more emphasis in the Senate bill.
The government should help farmers "when unexpected events beyond their control occur," the report said. For most businesses, unexpected events are covered by insurance and hedging in commodity markets. But the big subsidized farmers have not often used these tools. They have known that Congress cannot resist the political pressure they have been able to deploy for two-thirds of a century whenever drought, low prices or other adversity comes along.
This won't change soon. But if the report produces a greater skepticism about subsidies, it may have done some good.
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