Down on the Farm
Tucker, William
such dialogues were necessary because "international Jewry is undoubtedly behind the persistence of misunderstanding between Muslim and Christian and has disseminated deviation among Christian...
...What these figures mean is that people are using farms to offset other sources of income," said Bob Thompson of the department of agriculture...
...Soon the market was flooded...
...In a wide variety of field crops—corn, wheat, rice, cot-ton, barley, sorghum—the government guarantees farmers an artificially high price...
...But if that can't be done, the incentives designed to spur capital investment in other industries should at least be eliminated for farming...
...But it has become a major advantage for outside investors...
...A bitter farmer in Minnesota kills the banker who foreclosed on his farm last year...
...But it won't cost less than $20 billion for some time, either...
...The third annual North American Regional NGO Symposium on the Question of Palestine will take place June 9-13 at the United Nations...
...For an ordinary farmer the lowest in-come worth reporting is zero...
...Large portions of California have been settled almost entirely around the federal water programs," said Zack Willey, an economic consultant with the Environmental Defense Fund who has been working to introduce market mechanisms to California water projects...
...The way to solve the farm problem, then, is to stop helping farmers...
...For 1983—the latest figures available—the whole agricultural sector reported a net loss of $10 billion, about $3,000 per farm...
...The surplus production and land speculation are the predictable results of government manipulation of the market...
...Hang on a moment...
...This program is an "entitlement," like Social Security...
...Once such surpluses gush forth, the government must become the "consumer oflast resort" and buy up the surpluses...
...Another 13 percent have been made by the Farmer's Home Administration and 8 percent by the CCC...
...Even more remarkable, an incredible 30 per-cent of California's state water production is now used to irrigate pasture land...
...One big step would be to change the tax structure so that it no longer encouraged overinvestment in agriculture...
...Disarmament and one thing and another...
...But the long-run results would be healthy...
...Dairy farmers have their own special price support pro-gram that sets prices at about 110 to 115 percent above market levels...
...But would it mean the end of American agriculture...
...California's agriculture—which has replaced so much Southern and Midwestern farming—has been built almost entirely around large corporate farms...
...Similar surpluses have grown up in all the feed grains...
...A consensus is now emerging that, just as the oil price controls of the 1970s eventually pushed oil prices above their market levels, so the elaborate system of protections for farmers is actually pushing farm prices below their market level...
...The result has been the most recent chapter in the on-going farm crisis—the "debt crisis...
...Under pressure from Roosevelt's court-packing scheme, the Supreme Court made its famous "switch in time" in 1937 and upheld the second Agricultural Adjustment Act...
...There is no way of predicting what it is going to cost from year to year...
...Our conclusion was that 20 percent of agricultural investment over that period was made solely for tax purposes...
...But when the Reagan Ad-ministration brought inflation under control, the bubble burst...
...What they have failed to recognize, however, is that they are inviting other competitors into the industry...
...Farming is no longer something that is done solely to raise crops...
...The original purpose was to save unsophisticated farmers the trouble of having to keep complicated books...
...Last year it was $20 billion...
...When prices are left to adjust themselves, the desires of consumers and producers are brought into alignment, allocating resources in the most efficient way...
...Over the last decade more than 10 million acres of highly erodable land in West Texas and the Sand Hills of Nebraska have been plowed under for wheat and corn...
...At the end of the growing season, farmers of various crops are given Treasury-rate loans...
...Then we started dumping them onto underdeveloped countries, until we found this only ruined Third World farming...
...But agriculture fared differently...
...This completely unecoJust as the oil price controls of the 1970s eventually pushed oil prices above their market levels, so the elaborate system of protections for farmers is actually pushing farm prices below their market level...
...We recently looked at investment trends in farming from 1956 to 1978," said James Hrubovcak of the Departmentof Agriculture's Economic Research Service...
...As a result, farm prices would firm up...
...The market price of corn, for example, is now THE AMERICAN SPECTATOR JUNE 1986 21 around $2.10 a bushel...
...Farmland prices have tumbled 31 percent throughout the country, and over 60 percent in parts of Iowa, Nebraska, and Minnesota...
...It's a question a lot of people are beginning to ask," said John Lee of the USDA...
...You have to look at the organization as a whole, you can't just look at the single statements made by one individual...
...Who said what about the Dartmouth Review...
...Much of the nation's cotton industry has now abandoned the Old South and migrated to federally irrigated lands in Arizona and California...
...Rather than preserving homesteads, could farm subsidies actually be taking away the advantages of the family farm...
...As a result, the farm economy has become hugely overcapitalized...
...Tivo-thirds of all land transactions take place between farmers...
...As a result, dairy farmers constantly produce more milk than the market can absorb...
...They're always dealing with very marginal people...
...It is an indisputable fact that the Jews have succeeded in penetrating the highest offices in the Church...
...Originally intended to protect against "acts of God," it quickly came to be used to offset the traditional risks of farming land highly prone to erosion...
...Farming should be left to the farmers...
...Skyrocketing land values allowed them to roll over their debts each year by using their land as collateral...
...There was no serious effort to revive it...
...All this hasn't meant any loss of production, however," said Mike Belongia, of the Federal Reserve Bank in St...
...Investors would see more risk in farming and production would fall...
...Somehow this endless parade of stories never gets around to asking the key questions: Could it be possible that all the government programs are acWilliam Tucker is The American Spectator's New York correspondent...
...Consumers would pay higher prices in some instances, but would more than make up for it on taxes...
...Recently the Reagan Ad-ministration did succeed in capping the amount of a crop on which an individual farmer can collect...
...That switched in-vestment over to almond orchards where the same syndrome took place...
...Sure, we've done a lot to help farmers, said Dan Rather in a week-long special last March...
...They simply hand the crop over to the CCC...
...Hog-pens, cattle feedlots, orchards, and vineyards can, all be depreciated in five years...
...Is it possible that if we only stopped trying to help farmers, everyone—taxpayers and farmers alike—might be better off...
...Well, I know for a fact that what the guy said doesn't mean the organizationis pro-Nazi...
...22 THE AMERICAN SPECTATOR JUNE 1986 ly easy, subsidized credit that has been made available to farmers...
...Likewise, the smaller the perceived risk, the more people will invest...
...No one knows when, if ever, any of these supplies will be eaten by man or animal...
...This misunderstanding allows the system to borrow at close to Treasury rates...
...One of the most remarkable statistics floating around these days is the aggregate income that farmers declare for tax purposes...
...In accumulating tax advantages farmers have assumed they were only helping themselves...
...The World Muslim Congress is also treated by the World Council of Churches as a leading spokesman for the Muslim world and engages it in Christian-Muslim dialogue...
...The more extra investment that goes in-to agriculture, the more surpluses we produce...
...So the citrus growers lobbied to have the tax advantages reduced to cut off further investment...
...Take milk, for example...
...The tax rates on capital gains, of course, are much lower than on income...
...The problems begin when a coterie of producers or consumers convinces the government to set prices at a "just" or "fair" level...
...If farmers and ranchers had to pay anywhere near the market price for water, most of California's cattle production would be gone very quickly," said Willey...
...The government's efforts to deal with our milk surpluses are legendary...
...Of course it might seem foolish to put money in-to a business that is already overloaded with surpluses—but then, what are government price-support programs for...
...Most sup-port payments also end up in the hands of large farmers...
...And the more surpluses we produce, the more prices go down...
...Food prices would rise, making farming profitable for real farmers...
...A farm family is forced off its homestead in the Midwest...
...And in fact, now that many of the Farm Credit System's debts have turned bad, Congress is acting to bail it out—proving that investors were right all along...
...Some sectors almost certainly wouldn't survive without protection...
...Whole plants have been built just to turn these surpluses into cheese and powdered milk...
...Until the introduction of accelerated depreciation in 1982 most other industries operated on a fifteen-year schedule...
...TAS editor) e P. Kolk f Newsweek g Amos Tuck School of Business h George Will 1 Dudley Clendenin (New York Times) j John Steel (Dartmouth Trustee) k The New Republic I William F Buckley *not for credit answers: if 2j 3b 4a 5c 6g 7i 8d 9h 101 11k 12e contributions: no upper limit/tax deductiblet subscriptions: $25 for the year/30 issues name: address: city: state: Zip: The Dartmouth Review P.O...
...The same is probably true for corn and wheat...
...Agricultural economists usually point to the domestic sugar industry, which is insulated from a world market where prices are only one-third as high...
...The statistics are stark...
...Once prices are legislated, the two curves will no longer intersect...
...We still have enormous economic ad-vantages, both in the domestic and world markets...
...With federal disaster insurance, however, these marginal lands became accessible...
...In 1972, some Southern farmers suffered damage from Hurricane Agnes...
...The Farm Credit System, almostunique to the farm economy, is one of those ambiguously named agencies like Ginny and Fanny Mae that may or may not be a part of the federal government...
...When there's a guy out there who just wants to live on the land and pro-vide all his own labor, and who only wants to make about 4 or 5 percent on his money every year, there's basically no way we can compete against him...
...Thus, the program will probably not expand much further than it already has...
...What agricultural economists are now beginning to realize, however, is that this may be only the tip of the iceberg...
...California farming, by the way, pays almost no income tax...
...But because of the agency's history, investors tend to assume that it is still backed by the federal government...
...The Farm Credit System—not to be confused with the Commodity Credit Corporation—holds the largest share at 29 percent...
...Farm income has been at the highest level in our history over the last three years," said John Lee, director of the Economic Research Bureau of the Department of Agriculture...
...He has written previously on farming for the Atlantic and Barron's...
...If prices are fixed artificially low—as we did with oil prices in the 1970s—consumers will consume more and producers supply less...
...American agriculture has essentially become a cornucopia of tax-shelters for people whose main income is in other sectors...
...All the tax advantages and government programs make investors perceive farming as essentially risk-free...
...One of the most attractive features of "finance farming" is the seemingly innocuous law that allows farmers to keep their accounts in cash, rather than on an accrual basis...
...Box 343, Hanover, NH 03755 603/643/4370 to non-profit corporation .10.111.11 24 THE AMERICAN SPECTATOR JUNE 1986...
...The stores grow bigger every day...
...Certainly not...
...There would be fewer oversupplies, although we would probably have more fluctuation from year to year...
...The greater the perceived risk in any investment, the less capital it will attract...
...In Northern California, subsidized water is being used to grow rice—which requires putting whole fields under water...
...When inflation started pushing up land prices in the 1970s, many farmers speculated heavily...
...It all has to do with risk," said the University of Chicago's D. Gale John-son, a pioneer in the field of risk analysis...
...Congress responded by setting up the Disaster Payments Program, the DPP...
...We come up here looking for about twelve percent on our investment," he said...
...such dialogues were necessary because "international Jewry is undoubtedly behind the persistence of misunderstanding between Muslim and Christian and has disseminated deviation among Christian clergymen...
...In 1985 they made another $10.2 billion in loans...
...THE AMERICAN SPECTATOR JUNE 1986 23 nomical practice competes successfully with livestock operations in the Midwest...
...Thereafter, agriculture was completely regulated...
...What would happen if we scrapped this whole maze of entitlements upon entitlements and went back to some normal pattern of development...
...A second, almost equally expansive effort within the Commodity Credit Corporation is the non-recourse loan pro-gram...
...Just about every week the television news carries another story...
...The most important thing is to leave farmers alone to do what they do best—grow crops and raise animals on their own land...
...If the old-fashioned family farmers can't compete anymore, should people from other parts of the economy be forced to subsidize them...
...As a result, there is almost no form of farming today where the government is not the main player...
...A neutral tax code—which is what the Administration wants in tax reform—would be the best thing...
...These programs have never flagged—even when people began flocking to the Sun Belt...
...Dairy products would face similar competition...
...For a while we stored our surplus corn and wheat on decommissioned World War II battleships...
...If market prices fall below the "target" level, the government makes up the difference to farmers in the form of a "deficiency" payment...
...Producers always think "just" prices are quite a bit above market levels, of course, while consumers think they are quite a bit below...
...Buying shares in cattle ranches has always been very popular among movie stars, for some reason...
...California's only real economic advantage is in growing vegetables and produce...
...The land often gives out in less than five years...
...As of September 1985, the CCC was carrying loans of $12.5 billion—off-budget...
...The original National Recovery Administration, which "cartelized" most major American industries, was struck down by the Supreme Court in 1935...
...People are crowding into the business because of all its special ad-vantages and protections...
...The government eventually started renting space in Midwestern silos, and since the Payment in Kind (PIK) program it has been handing the surpluses back to the farmers...
...Since the nineteenth century, the scrubby sagebrush lands of West Texas and the High Plains in Colorado and Wyoming were always regarded as too fragile for "sod-busting...
...The game now is who will pay the storage costs...
...The local doctor or dentist can usually do it...
...Dawalibi was quoted in Time on March 15, 1954, when he was defense minister of Syria, as saying, "The Arabs would prefer a thousandfold to become a Soviet republic than a prey to world Jewry...
...Although it is little noted, farmers today are actually making more money than ever...
...Louis...
...Regional NGO conferences met in Turkey in April and Latin America in May...
...That means you don't have to pay taxes...
...A depressed farmer in Georgia shoots himself...
...The great irony about the federal orchestration of agriculture has been that nearly all the programs work against family farms and in favor of larger units...
...By that time everyone—including Franklin Roosevelt—had realized that it wasn't such a great idea...
...Theodore Roosevelt's Conservation Program the federal government took responsibility for developing Western water resources in order to promote settlement...
...As a result, farming is attracting too much capital...
...Tax revenues were funneled in from other parts of the country...
...Major corporations cannot do this...
...When the operation begins to break even—usually within five years—it is sold off as a capital gain...
...None of this has been based on economics...
...In terms of results, it hardly matters...
...Thus, there is a tremendous amount of easy credit in the agricultural sector that is not available elsewhere in the economy...
...We meet together on a whole variety of subjects...
...This year's "target" price is $3 a bushel...
...The system's $80 billion in loans have all been raised in Wall Street's private money markets...
...Every basic farm program that operates today comes out of the New Deal...
...The major beneficiary would be that sacred American institution: the family farm...
...In 1981, the cost to the Treasury was $2 billion...
...Of course these methods tend to produce their own equal and opposite reaction...
...In addition to cash accounting there are still other unique benefits that lobbying groups have been weaving into the tax code for decades...
...So there you have it America's oldest and largest industry now almost completely rebuilt around government subsidies...
...The Farmer's Home Administration is another lender of last resort...
...A recent New York Times story included this remarkable quote from a Tbxas oil executive who was "farming corn subsidies" in a large-scale corporate effort in Nebraska...
...But just as significant as government efforts to hold prices above market levels has been another set of programs designed to supply farmers with below-market credit...
...One of the main causes of the "farm crisis," then, has been the unrealistical"American agriculture has essentially become a cornucopia of tax-shelters for people whose main income is in other sectors...
...And they keep coming...
...Then when the business starts making money you sell it and take the profits as a capital gain...
...The documents also disclose his close collaboration (as personal secretary) with the Grand Mufti in the latter's efforts in support of Hitler and the Axis powers...
...Now the action has switched to other specialty crops...
...Obviously, there would besome initial dislocation...
...During the 1970s, investors went wild setting up California citrus groves...
...To any student of freshman economics, this is all drearily familiar...
...Huge caves outside Kansas City are now being filled with enough of these products to stuff every man, woman, and child in the United States for the next two years...
...What we really have is a debt crisis that is concentrated among about 15-20 percent of all farmers...
...As you know, the Quakers worked enormously with the Jewish community in the years when the Jewish community were on their knees...
...The nation's Farm Belt is in crisis...
...It has to do with those simple supplyand-demand graphs that appear on page whatever-it-was in Paul Samuel-son's textbook, Economics...
...The result will be a "shortage"—as in "oil short-age...
...1 offensive 2 astounding 3 sassy . . . must reading 4 an impressive paper 5 impressive 6 90.2% . read The Review 7 sophisticated & professional 8 energetic & vital 9 delighted 10 provocative 11 has succeeded 12 good rag a Ronald Reagan (man of many words) b New York Times c Lynn Nofziger (man of few words) d R. Emmett Tyrrell, Jr...
...Inversely, when price controls produce a shortage of a commodity like oil, the cry goes up that the government must become the producer of last resort and create its own oil company, or even nationalize the industry...
...There will be another in Vienna this month, and the series will wind up with an international NGO conference in Geneva in August...
...0 c~l~e Bartawutli Iieutew ~Temu me tmpune lacessit a short test...
...In 1983 the Anti-Defamation League unearthed four documents from the archives of the German Foreign Ministry that verify that Dawalibi served as the Paris agent of the Nazi party official in charge of Arab affairs, SS Obergruppenfiihrer Erwin Ettel...
...The marginal price of water in the San Joaquin Valley is now $600 per acre-foot, yet the Bureau of Land Management still sells it to farmers for as little as $3 an acre-foot...
...Yet with government crop insurance, plus the price supports, plus the tax advantages, it pays off...
...Traditionally the FHA is supposed to help young farmers who haven't had the chance to establish credit, but in practice few farmers have ever established them-selves through FHA...
...In fact, if the IRS taxed farmers at a rate of zero, the Treasury would gain $3 billion...
...But how does an organization like yours explain or justify working with a racist and neo-Nazi group...
...Supply and demand can be represented as two curves that intersect at a point called "market price," or more accurately, "market-clearing price...
...The target price has no relation to wind, weather, or the price of cheese...
...Planting the trees or building the feed lot will involve large initial outlays, creating big write-offs...
...It's very easy for investors to get into farming on a small scale," said D. Gale Johnson...
...He wrote, "Your in-depth analysis is superb and clear-cut...
...If the price of the crop doesn't reach an arbitrarily selected "loan rate," farmers don't have to repay the loans...
...The difficulty with farming is that so many of the risks have been reduced...
...What do you mean by `us...
...We probably wouldn't grow much sugar cane or sugar beets," said Zeke Pasour of North Carolina State University...
...Farming is the only industry still operating under the New Deal...
...The World Muslim Congress remains an NGO...
...We now are working with a whole range of other people who are on their knees...
...Commercial banks finance only 23 percent of farmers' debts, while 22 percent come from private lenders (usually the previous landowner) and 6 percent from life-insurance companies...
...If prices are artificially high, two things will happen: producers will supply more, and consumers will buy less...
...Under...
...The World Muslim Congress appeared in the pages of Willis Carto's Spotlight in July 1985, the same month that the symposium on Palestine was held at the U.N...
...William Tucker DOWN ON THE FARM The government subsidizes a crisis...
...As a result, farmers in the program will sell their corn at market value and the government will pay them the difference of 90 cents a bushel...
...We're not worried about what you or anybody else think about us...
...You have to have been rejected by two other lenders before you can apply to the Ad-ministration," said Bob Thompson, assistant secretary of agriculture for economics...
...tually hurting farmers...
...Perhaps the most monumental subsidy in our nation's history has been the Western irrigation programs carried out over the last half-century by the Bureau of Land Management and the Army Corps of Engineers...
...It is just what the political market will bear...
...Typically, an investment syndicate will build up an or-chard, a vineyard, or a cattle ranch...
...Agriculture is too complex and important to be managed by Washington...
...Originally funded out of the Treasury, it has since been turned over to the private sector...
...Target prices and all the other government price manipulations are the sole cause of farm surpluses, our chronic agricultural problem...
...These projects were supposed to be self-supporting, but probably no more than 20 per-cent of the capital expenditure has ever been repaid to the Treasury...
...Hint: contents deleted to protect the guilty...
...The $10 billion loss is being written off against other income...
...Farm subsidies have now risen to $20 billion a year...
...Instead they were put into cattle grazing or left unused...
...Then every once in a while the net-works will get tough and analytical...
...But with cash accounting you can bunch up your expenses at the start of an enterprise and declare huge losses...
...Inevitably the question is put: Why don't we give farmers more aid...
...But to tell the truth, without federal programs we couldn't do it...
...Most of my contact with the World Muslim Congress is through a loose coalition of religious NGOs," Roger Naumann of the Quaker UN office told me...
...But after all, shouldn't there be a limit...
...They're just farming the government subsidies...
...The result is an economic "surplus' as in "farm surplus...
...No one knows how many of these will ever be paid back...
...Many of your stories are eye openers...
...It set a record at $39.5 billion in 1984 and will probably reach $43 billion in 1985 [about $30,000 per farm...
...Our purpose is mediation, bringing economic justice and peace in the world...
...Yet that is only the beginning...
...Of the $210 billion in loans now held by farmers, exactly half have been extended by government or quasi-government agencies...
...Twenty billion dollars in farm subsidies amounts to $100 a year for every man, woman, and child in America...
...As one Wyoming rancher recently told the New York Times "These new people out here aren't really farming the land anymore...
...Accrual bookkeeping means you have to make some attempt to match income with expenses," said John Lee of the Economic Research Service...
...Outside of vegetable farming, there is not one major agricultural sector in the country where a farmer must put his seed in the ground in October or April without the knowledge that the government will be there to bail him out at the end of the season...
...One other thing is certain...
...Production patterns would probably shift around the country to a more economical alignment...
...The U.N.'s grand obsession rolls on...
...Start, for example, with the price support program operated by the Commodity Credit Corporation, a quasi-government agency...
...When a farmer in Iowa goes under, his land is usually bought by another farmer who puts it right back into production...
...In a letter to the editor, the general secretary of the congress, Inamullah Khan, wrote from Pakistan that he just wanted to express his appreciation for such an "excel-lent" publication...
Vol. 19 • June 1986 • No. 6
