THE PHONY FARM "CRISIS"

...A General Motors safety net...

...agricultural marketplace and perpetuate what have become nearly annual farm "emergencies...

...About 1 percent of the largest farm corporations command about 50 percent of the market—and receive the lion's share of the government's largess...

...The corn and soybean crop in Maryland this year is almost entirely lost...

...It hardly stands to reason that we or our children should therefore be tilling the soil...

...A bushel of soybeans sold for twice as much four years ago as it does now...

...America has many small ones...

...Those payments often enrich absentee land owners, not the people actually tilling the soil...

...A farm crisis once meant that crops died in the field and people went hungry or even starved to death...

...The 2000 presidential hopefuls—from George W. Bush to Bill Bradley—have been making buffoons of themselves pandering to Iowa farmers over ethanol subsidies...

...What we are living through now is a triumph, not a crisis, of American agriculture...

...An essential part of free market wealth creation is allowing firms—whether steel mills, GM plants, or Wall Street investment firms—to pass through a natural life cycle of birth, hopefully rapid growth, and, yes, eventual demise...

...So far the act has been a partial success...

...According to the Department of Agriculture, most of the small "family farmers" that our sense of nostalgia says are worth preserving, are not full-time farmers at all, and receive only about 17 percent of their income from farming...

...It is a success story that emanates from the incredible productivity of the American farmer...

...The same week this summer that the Senate approved $7.5 billion in relief to American farmers because prices are so low, the United Nations reported that in the past three years 250,000 people have starved to death under socialist farm policies in North Korea...

...To ZcS^'ll let Adam Smith's version of the free market play its course could mean the loss of an American icon: the family farmer...

...It is an economic truism that when you subsidize something, you get more of it...

...This summer the media have saturated the airwaves with Norman Rockwell-type portraits of beleaguered family farmers in their overalls, planted on their tractors in the searing sun valiantly battling “the worst drought since the depression...

...So farm supports tend to replenish the already deep pockets...

...We ought to keep some historical perspective on our modern-day farm problems...

...The normally economically sensible Steve Forbes even preposterously told Iowa farmers that Federal Reserve chairman Alan Greenspan was the source of their woes...

...The main impact of subsidies is to destabilize the WHEN FARMERS ARE PERMITTED TO PRODUCE FOR THE MARKET, NOT FOR GOVERNMENT, THEN OUR FOOD SUPPLY IS SECURE AND PRICES ARE LOW...

...In the absence of federal intervention, such insurance would be both more affordable and more sophisticated, allowing farmers to buy protection against precisely the kinds of miserable summer conditions that have prevailed these past two years...

...Today the number is around one in forty...

...In 1900 more than one in three American workers were in agriculture...

...Tens of millions of dollars of livestock have dropped dead from the heat...

...A semiconductor safety net...

...About half of the $1 to $2 billion in annual sugar subsidies, for example, enrich fewer than a few dozen large multi-million dollar sugar plantation owners...

...So while half the nation's farmers are complaining that their crops are ruined by drought, the other half, with bumper crops, protest that they can't make any money selling them...

...Yes, this is one of the worst years ever to be a farmer...

...By 1950 it was still about one in ten...

...Farm subsidies are corporate welfare for agri-giants and do little to help the small family farmer compete...

...In the early 1980s, Lester Brown, president of the Worldwatch Institute declared, "The period of global food security is over...

...That was no aberration...

...Under this laudable legislation, federal restrictions on the acreage farmers are allowed to plant have been lifted entirely, and price supports are supposed to be phased out within four years...

...But to blame this on the Freedom to Farm Act is ludicrous, because the family farmer has been disappearing gradually for 100 years...

...Our superabundance of food is one of the great modern-day success stories and one of mankind's greatest technological triumphs...

...In Minnesota, we are told, S^^r^QQrj more than 1,000 small farms have ceased operation each month this year...

...He is referring to the 1996 Freedom to Farm Act, which was intended to wean farmers from federal payments...

...That the farm population happens to live in political battleground states like Iowa just makes matters worse...

...Farm spokesman Leland Swenson says the source of farmers' miseries is "a laissez- ^^^HB faire euphoria in Congress that declared the country's farm and food policies unnecessary...

...this surge in output and affordability as a triumph for consumers and a further sign of the fruits of technological progress...

...But clearly there is no law of economics or nature that necessitates government intervention for farmers to survive...

...The truth is that the doomsayers were amazingly errant in their predictions...

...A steel safety net...

...Only about 2.5 percent of Americans actually produce food...

...North Korea has one huge farm problem...

...Even if we decided that national policy should be to preserve the family farmer, what is clear is that the quarter trillion dollars of crop subsidies over the past 20 years—enough money to have bought all of the family farms west of the Mississippi—have done nothing to achieve that goal...

...In a town whose very existence is predicated on providing concentrated benefits to narrow interest groups, and spreading the costs to the rest of us, Congress and the White House can only think of the victims of cheap and abundant food...

...Economists have noted that the major financial impact of our generous matrix of farm payments is not to raise farm income, but to artificially inflate the value of farm land...

...Just 20 years ago, the doomsay-ers at the Club of Rome, the United Nations, and the Carter administration State Department were glumly predicting the opposite kind of food crisis: global scarcity by the year 2000 and ever escalating prices...

...The other 97.5 percent of us just buy and eat it...

...The Wall Street Journal recently reported that "the government forked over $2.4 billion between 1985 and 1994 to about 16,000 farmers, most of whom did not live on their land, did not drive their own tractors and were mostly indistinguishable from their affluent suburban neighbors...

...What is worrisome is that a growing number of farm interests are tracing their woes to the market...

...Thanks to the amazing productivity of American farmers, the typical family in the United States now spends just 10 percent of its disposable income on food—the lowest percentage anytime, anywhere in the history of the human race...

...For if we are to create a farm safety net that prevents farmers from going bankrupt, what next...

...It is clear, however, that most congressmen and many other Americans mistakenly believe there is something jBRvfflL unique about the agriculture business...

...Opponents of Freedom to Farm retort that the peculiarities of agriculture make free markets unworkable...

...Clearly, rising and falling commodity prices can't both be catastrophes or we really are doomed...

...Liberated to plant whatever they wish whenever they wish, farmers are generally producing bumper crops...

...Worse, Congress continues to provide farmers with an implicit income guarantee and a floor on the prices they will receive for their crops...

...It defies all logic why some of these farmers are endowed with a blanket of government protection, and others brave the market...

...This would set a frightening precedent...

...Corn now sells in some places for $1.50 a bushel, the lowest price since Elvis was alive...

...To be sure, free market farming will inevitably lead to greater farm consolidation and more bankruptcies, with the attendant social costs attached to these unwelcome events...

...The White House wants to appropriate twice that amount...

...Most of us remember the news stories a few years back of tens of thousands of dollars of agriculture subsidies paid to famous American farmers like ABC's part-time rancher Sam Donaldson...

...But despite the bad weather, the real source of angst for most farmers these days is not too little food but too much...

...In 1998 and 1999, farm payments have risen, not fallen as planned...

...And we certainly wouldn’t be better off if we were...

...But out of some 400 major agriculture commodities produced and sold commercially in the United States, only a few dozen receive a helping hand from government...

...Unfortunately, Washington doesn't see it that way...

...To argue that low food prices are a worrisome development because they hurt farmers makes about as much sense as complaining that increased life expectancy is a bad thing because it wrecks the undertaker's profits...

...As the demand for food continues to press against the supply, inevitably real food prices will rise...

...In just the past year, cotton prices are down 46 percent, and wheat has tumbled by more than 60 percent...

...At the very time that food prices are falling rapidly and the invisible hand of the market is trying to squeeze out the marginal producers who are least efficient, the government perversely pays these farmers to keep at it...

...For almost all of us, falling food prices have meant a real increase in our standard of living...

...If the Freedom to Farm Act is rolled back or repealed, it will be a victim not of its failure, but of its success...

...And American consumers will pay the price...

...These are tragedies, yes, but of small proportions...

...In most other industries, we would be celebrating Stephen Moore is director of fiscal policy studies at the Cato Institute...

...A recent David Broder column in the Washington Post tells the tragic story of an Iowa farmer who committed suicide rather than face another year of declining revenues and impending bankruptcy...

...President Clinton, who signed the Freedom to Farm act, now talks of creating a permanent "farm safety net," which seems to suggest that farmers should be treated as welfare moms once were: forever dependent on federal transfers to make ends meet...

...There are multiples more beneficiaries than victims when the prices of agricultural commodities fall...

...Fewer than 10 percent of land owners own more than 75 percent of the farmland...

...Milk, sugar, corn, wheat, cotton, peanut, and soybean producers receive welfare payments...

...On top of the $16 billion in federal dollars lavished on farmers already this year, and the $6 billion of "emergency" farm subsidies last year to Oklahoma, Texas, and Dakota farmers suffering from what was then said to be the worst drought since the 1930s, Congress now wants to dole out $7.5 billion more for 1999...

...The lesson of the first few years of the Freedom to Farm Act is that when farmers are permitted to produce for the market, not for government, then our food supply is secure and prices are low...

...Most farm subsidies today flow to the same profitable agribusinesses that the public, the politicians, and small farmers complain are cornering the market...

...Most of us had a grandfather who worked on a farm and virtually all of us had a great-grandfather who was a farmer...

...What an appropriate diagnosis for this year’s farm “crisis...

...Most fruit, vegetable, timber, flower, and livestock producers survive and even flourish under the whims of generally free market conditions...

...These de facto income supports and price controls inhibit the development of a market for insurance policies against droughts, floods, and wild price fluctuations...

...But they are also still demanding and receiving federal subsidies when prices fall too low—which is one of the reasons for the oversupply of food...