14 August 2004

The Real Farm Subsidy Scandal

From 1995 to 2002 the U.S. taxpayer doled out more than $114 billion to farmers, and in 2002 President Bush upped subsidies to $190 billion over the next ten years. For perspective, consider that in 2000 alone U.S. spending on farm subsidies exceeded the total output of more than 70 nations.

With so much money being freely handed about, the GAO report should lead to some tough questions for USDA officials on Capitol Hill. Yet for all its detail, the 75-page report artfully avoids the bigger question that no lawmaker wants to hear: why do we even have farm subsidies?

One popular misconception that contributes to support for farm subsidies is that because they result in lower food prices, they are a boon to consumers. This ignores the fact that taxes pay for these subsidies. Any reduction in supermarket prices is paid for by your taxes -- or someone else's -- whether you buy that ear of corn or not.

Farm subsidies are not intended to reduce the cost of food significantly. If prices fell too much, farmers would lose money. To prevent this, Congress also has 'environmental' conservation subsidies that pay farmers to not cultivate their land, resulting in higher prices for crops made more scarce. Consequently, from 1995 through 2002 we paid $14 billion for farmland conservation subsidies that increased the price of our food!

And remember, folks, the free trade treaty that says not one word about US agricultural subsidies. In fact the treaty maintains quotas and traiffs on beef, dairy and sugar. Fortunately the treaty places no limits on trade in smoke and mirrors (unless they're the subject of a copyright or patent).

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