Ag offers a harvest of budget cutsKANSAS CITY, Mo. — In the summer debt ceiling deal, Congress set up a “supercommittee” to find $1.2 trillion in additional budget cuts over the next decade. The panel began work — and so did the lobbyists. Among the most energetic are those defending farm subsidies.
KANSAS CITY, Mo. — In the summer debt ceiling deal, Congress set up a “supercommittee” to find $1.2 trillion in additional budget cuts over the next decade. The panel began work — and so did the lobbyists. Among the most energetic are those defending farm subsidies.
Areas for change
The wholesale elimination of the nation’s agricultural programs won’t happen. Yet it should be possible to push through two important reforms: Terminate annual cash payments and create an effective income cap to curtail subsidies for wealthy farmers. As a bonus, one might even hope for an end to ethanol subsidies.
Cash payments are outlays based on acreage and historic yield, and they are paid whether farmers grow anything or not. Cost to taxpayers: nearly $5 billion a year.
Continuation of programs
Blake Hurst, president of the Missouri Farm Bureau, says the program should continue, partly because many farmers still depend on those checks. Hurst says he understands agriculture will face cuts this year, but he would prefer that all programs continue, even at lower amounts.
That, however, would make it easier for lawmakers to add money to those budget items later. Eliminating a program entirely ensures that the savings continue.
The Obama administration agrees that cash payments should cease. Even some farmers no longer support them. Craig Lang, president of the Iowa Farm Bureau, told The New York Times that with the economy so weak, he could not justify taking the money.
Lang’s perspective is apt, given that the farm economy and the overall economy have spectacularly diverged. The last decade had five of the best years for farm income, and this year is projected to be another blowout — a 30 percent increase in farm income from 2010 to nearly $104 billion.
No one begrudges the nation’s farmers this good fortune, but the budget crisis requires substantial cuts.
How can Congress support the current level of farm spending when many of these farmers” don’t live on the land? The Agriculture Department says $394 million went last year to recipients who lived in cities of 100,000 people or more.
A second big improvement would be a realistic income cap, meaning subsidies would stop for farmers with incomes above the cap. The current limit is $750,000 — ridiculously high. Some have championed a limit of $250,000, which seems more than generous. To most Americans, those with incomes at that level are rich. Nothing wrong with that, but they don’t need money from taxpayers.
That isn’t all the supercommittee could do. It should cut the ethanol program, which costs billions and diverts 40 percent of the corn crop to fuel production, boosting prices for consumers.
For many farmers, crop insurance has become the most important source of taxpayer cash. It, too, needs reform because it encourages farmers to plow marginal land, knowing they’ll be paid whether they produce a crop or not.
Nearly two-thirds of the nation’s farmers — growers of fruit, vegetables, nuts, beef and poultry — do without direct subsidies. The budget crisis is a signal that it’s time for the rest of the farm sector to get along with a lot less of what amounts to corporate welfare.