The Public Policy: Freedom to Farm Washington
Bovard, James
THE PUBLIC POLICY by James Bovard Freedom to Farm Washington N othing better symbolizes the collapse of Republican principles than the multiple farm bailouts Congress has passed since July....
...Tom Harkin (D-Iowa) correctly labeled the new handouts as "election year panic payments...
...Government farm subsidies in the United States rose 31 percent between 1995 and 1997, according to the Organization for Economic Cooperation and Development...
...The USDA report concludes that "in most cases...the resulting [higher] rents...essentially passed on much if not all of the [subsidies] to the landlords...
...Congress also seemed finally ready to recognize that setting federal price supports higher than market prices undercuts exports and encourages farmers to dump their harvest on the government...
...Compare the supposed Republican Revolutionaries with the Democratic "Big Spenders" who voted to abolish the honey, wool, and mohair programs in 1993, phasing them out over three years...
...T he Republican collapse on farm policy is symbolized by Gingrich, who this past July denounced the Clinton administration for having "consistently failed" to be "more aggressive" in subsidizing grain exports...
...Direct subsidies to farmers could rise more than 75 percent between 1997 and 1998—to nearly twice the level of before Freedom to Farm...
...Naturally Congress is panicking...
...By inflating both rents and farmland values, the act boosts the cost of crop production and undermines American competitiveness in world markets...
...Yet farm disaster programs have long been rife with fraud, waste, and rewards for damaging the environment...
...Unfortunately, the core of the act consists of "market transition payments" — money Congress pays farmers to make up for the chance that subsidies might end sometime in the next century...
...Wheat farmers got fifty times more in subsidies for their 1996 crop than they would have gotten under previous law, as George Anthan of the Des Moines Register reported...
...At a July 17 press conference endorsing more farm aid, Gingrich revealed: "I think we have to be practical about the impact of rain" on farmers...
...The Chocolate Manufacturers Association gets almost half a million dollars a year to promote chocolate exports—which are thwarted by federal policies driving U.S...
...A mere 24 percent of all farmers—those with a history of receiving government handouts—are harvesting Freedom to Farm payments...
...Agricultural subsidies are skyrocketing, and the 1996 "Freedom to Farm Act" — ritually invoked as a triumphant achievement of the Republican Revolution—may soon be as much in ruins as a Sudanese pharmaceutical factory...
...Instead, subsidized farmers received more than three times as much in cash handouts over 1996 and 1997 than they would have received under the previous five-year farm bill...
...Without the new law, farm subsidies would have fallen to their lowest levels in decades, thanks to historically high crop prices...
...But at least subsidized exports allow American politicians to pretend they are getting tough with the European Union...
...Gingrich now seems to believe that taxpayers must be held liable for each raindrop that doesn't fall...
...The Wall Street Journal declared that "this is the kind of change the 1994 election was supposed to be about" and proclaimed that the act's passage "would demonstrate that Republicans are willing to trust their free-market principles...
...Clinton JAMES BOVARD is the author ofLost Rights: The Destruction of American Liberty (St...
...Farmers with a record of government dependency will get a one-time 29-percent boost in "market transition payments...
...By driving up farmland values, the act also raises entry barriers for young Americans who want to buy their own farm, and increases the chance of another crash in farmland values, which could lead to farm bankruptcies...
...72 November 1998 • The American Spectator Farmers will likely get over $u billion in the period just before and after the November election, according to an analysis by Sparks Companies, one of the nation's most respected agricultural forecasters...
...In September, Gingrich and other Republicans rushed to pass a second farm bailout, giving farmers an extra $4 billion — over $2 billion for "disaster assistance" and almost $2 billion in direct handouts...
...Gingrich himself almost single-handedly derailed efforts to fix the peanut program, which requires farmers to get a federal license for every pound of peanuts they grow...
...To the GOP freedom to farm means freedom to subsidize...
...exports...
...This is like going into the inner city and buying Mercedes for welfare recipients while passing over all low-income persons who support themselves...
...The Agriculture Department (USDA) has been heavily subsidizing exports for thirteen years, yet not a single new market has been captured and held for American farmers...
...A* EMERGENCY FOOD STORAGE Stores 25 years Immediate Delivery Guaranteed Lowest Prices Perma Pak Gourmet Foods Since 1953 FREE Info Package 1-800-414-9324 permapak®usa.net The American Spectator • November 1998 73...
...In July, it voted for $5oo million in "disaster payments" to farmers, and for early payment— just before the November 1998 election—of $5 billion in agricultural handouts originally due next year...
...And the act perpetuated the Conservation Reserve Program, by which the feds give farmers lavish 10-year contracts to leave idle 35 million acres of farmland...
...Led by House Speaker Newt Gingrich, Republicans boasted that the 1996 act, which set policy for the following seven years, had revolutionized agricultural policy...
...USDA subsidizes the export of some of the very products (including raisins and almonds) whose export USDA marketing boards restrict...
...Yet studies show that it would often be cheaper to burn the crops at home than to bribe foreigners to take them off our hands...
...signed the act under protest, promising to try to revive failed programs and policies as soon as possible...
...Martin's Press...
...Landowners have responded to new subsidies by raising the rent farmers pay...
...The collapse of the Freedom to Farm Act was predestined by its fine print...
...Congressmen claimed the boost would compensate farmers for low prices—but there was no reduction of federal handouts in 1996 and 1997 to "compensate" taxpayers and consumers for high prices...
...To be fair, congressional Democrats have generally championed far worse farm policies...
...The libertarian Cato Institute hailed the bill...
...In the past, farm subsidies declined as crop prices rose...
...The 1996 law should have been known as the Freedom to Farm Washington Act...
...It authorized six New England states to create a "dairy compact" to prohibit the import of milk from outside their domain, and milk prices there have since jumped sharply as a result...
...The longer the abolition of farm subsidies is delayed, the less likely it is to occur—and the more likely that farmers will again become entangled in government restrictions...
...Conservatives bought the rhetoric...
...The Export Enhancement Program sometimes pays subsidies equal to nearly loo percent of the value of exported crops, thus guaranteeing that the U.S...
...The 1996 act also contained a provision mandating that, unless Congress acts decisively to abolish subsidies by 2002, agricultural policies will revert to the 1949 Farm Act— a law that would impose severe production cutbacks and compel USDA to boost price supports for major crops by 5o percent or more, thereby destroying U.S...
...As with bailouts by the Federal Emergency Management Agency, definitions of "drought" and "natural disaster" are continually stretched to allow congressmen to buy as many votes as possible...
...sugar prices to double world market levels...
...The only reason the 1996 law contained this provision was to allow the farm-welfare lobby to extort more benefits in the next century...
...The Freedom to Farm Act is no savior for farmers...
...sells at a loss...
...American Spectator columnist Grover Norquist declared that "Freedom to Farm injects the free market into the nation's agriculture system" and called the bill "a model" for reforming other heavily subsidized sectors of the economy...
...But the next Congress will almost certainly enact new handouts to take their place...
...On the bright side, the bill did reduce regulatory burdens on farmers, abolishing requirements that they leave land idle to qualify for federal crop subsidies...
...Freedom to Farm merely promised to phase out subsidy levels in the politically distant future—after deluging farmers with extra money in the short run...
...Other such programs are equally futile...
...Farm income soared to near record levels in 1996 and 1997, thanks in part to hefty subsidies, but is falling back to non-stratospheric levels this year...
...If the Republicans' idea of freedom is less regulation and bigger welfare checks for landowners, it is no wonder that Gingrich & Co...
...The GOP Congress never considered such a resolute approach...
...USDA spends over $4 million a year to boost American whiskey and wine exports, in a program that the General Accounting Office has deemed unworkable...
...A 1998 USDA study finds that most of the act's benefits are going to landowners—often pension or insurance companies—instead of to the people who actually do the sowing and reaping...
...Most farm products in this nation receive no subsidy, but a handful including wheat, corn, cotton, sugar, and dairy products have perennially enjoyed huge windfalls...
...It will take more than clever bill titles to roll back big government...
...The only difference between the subsidized and unsubsidized crops is the political pull of those who raise them...
...Republicans claimed that the premature payout had no net cost, since farmers were going to get the money anyhow...
...have lost credibility with the people who brought them to power...
...The federal government spends half a billion dollars to heavily subsidize crop insurance, which many farmersdon't bother to buy—because they know that Congress will shower them with money after a drought...
...The 1996 act perpetuated or exacerbated some of the most foolish federal farm policies...
Vol. 31 • November 1998 • No. 11
