This year’s congressional spending bills are coyote ugly, with federal spending exceeding the Republicans’ own self-imposed budget caps by close to $ 100 billion. Republicans no longer have a credible anti-big-government agenda to promote. Nowhere is that more evident than in this year’s farm bill.
Just five years ago congressional Republicans passed a landmark farm subsidy reform bill called the Freedom to Farm Act. It was supposed to phase out crop and dairy subsidies over five to seven years so that farmers could finally produce for the market rather than for Uncle Sam. The bad news is that the act has now been officially eviscerated.
This year’s $ 35 billion farm bailout bill is by far the most costly ever. If we just passed out the dollars directly, we could make every full-time farmer in Illinois, Iowa, and Nebraska a millionaire. Aside from the billions for grain subsidies, many new food types will get taxpayer assistance. Florida citrus and lime growers will receive $ 58 million in payments. The famous wool and mohair subsidy has been resurrected so that Vermont sheep herders will be eligible for $ 20 million in handouts this year. Connecticut oystermen will get an emergency bailout. The loan program for a small handful of very wealthy Florida sugar plantation owners is more generous than ever. Oh yes, and the poster child for corporate welfare — taxpayer subsidies for foreign advertising of giant agri-businesses like Ralston Purina, Pillsbury, Dole, and Ernest and Julio Gallo wines — lives on for yet another year to the tune of $ 100 million.
Aggrieved avocado farmers in California will now get funds from a new tax on imported avocados. The tax dollars generated from this “will be used to fund research and marketing campaigns in favor of avocado consumption.” Evidently this means that any day now the folks at the USDA will be distributing tangy recipes for guacomole dip. I am friends with a well-to-do couple who recently cashed in some of their stocks and bought a lovely get-away-from-it-all ranch outside Santa Barbara. They are now avocado farmers. They’re thoroughly modern American farmers. They drive their produce to market in the trunk of their Lexus. You can imagine how delighted they were when they learned that they may now be eligible for USDA-style welfare.
The truth is, wherever you live nowadays, and regardless of your income, if you’re planting seeds in your backyard garden, you may just be eligible for federal aid. If you grow apples or potatoes, you could get a slice of $ 138 million in subsidies. Planting onions? There’s $ 250,000 available if they’re Vidalia onions. How about asparagus? The federal government has created for you a $ 250,000 “international asparagus competitiveness council.” If you’ve got cranberry bushes, you could be eligible for the $ 30 million that Uncle Sam will spend this year purchasing cranberry juice. The only bad news is that you’ll have to compete with Ocean Spray, which figures to snatch up the vast majority of this largesse.
The strange resurrection of the wool and mohair subsidy is symptomatic of the budget retreat of Capitol Hill Republicans. Created in the early 1950s during the Korean War, this goat and sheep herder subsidy was said to be vital for national security in order to make sure that the United States had enough domestic wool production to put uniforms on our American soldiers. Really and truly. This is how the program got its start. Mohair comes from a special breed of Texas Angora goats — so the Lonestar State representatives were big fans of the welfare payments. Starting in the 1960s the Pentagon switched over to cotton and synthetics for uniforms and suddenly the Cold War national security rationale for wool and mohair subsidies disappeared into thin air.
But the subsidies didn’t. Over the course of the next three decades, federal taxpayers have provided several billion dollars in handouts to America’s sheep and goat herders. Starting in the early 1990s, the program started to get bales full of bad publicity. The Wall Street Journal famously reported in 1995 that the third largest recipient of wool subsidies in Lincoln Country, New Mexico, was none other than the famous herdsman, Sam Donaldson of ABC News. Donaldson was pocketing as much as $ 97,000 a year in annual payments from the USDA, with the checks sent to his suburban Virginia home. Suddenly the program became expendable when taxpayers learned that millions of their dollars were being delivered to wealthy urban and suburban farmers.
In 1996, the Republicans did a heroic thing by killing the program. No more sheep herder subsidies. It was one of the very few programs that Newt Gingrich and his fellow revolutionaries could point to as proof of the Republicans’ boast that “we know how to get rid of federal programs, not just create new ones.” Not so fast, though. Last year the program mysteriously rose from the dead. The National Sheep Industry Improvement Center was created to provide “temporary” help for sheep herders facing the dual problems of over-production and low prices. The program was labeled emergency assistance and $ 10 million of aid was offered — a pittance given the size of the total farm bill.
But in Washington’s budgetary parlance, the term “temporary” is a euphemism — the 100-year-old telephone tax we all pay each year was “temporary.” This year the subsidy not only remains, it doubles in size thanks to another miserable year in the market for wool prices. For producers, that is, not people shopping for clothes.
What is strange about the Washington mindset regarding agriculture is that year after year, falling prices are treated as a tragedy. In virtually every other American industry, falling prices are generally regarded as a good thing because they directly benefit consumers. That’s true of oil, steel, copper, textiles, telephones, televisions, and computer chips. So why isn’t it true of potato chips? The answer is that Americans want to save the icon of the small American farmer — even though hundreds of billions of dollars in subsidies over the past quarter century have done little to stem his decline.
So if you thought farm subsidies were going to go away soon and American farmers would soon be producing in a competitive and unfettered free market — sort of like what just about every other businessman in America does — forget it. Jonathan Rauch of National Journal recently reported that “the 1996 farm bill was supposed to spend $ 42 billion over seven years, with payments declining every year.” Instead, he found, “Congress’s own numbers show that the actual spending will be more like $ 86 billion, with payments rising every year.” Oops.
Six years after the Republicans took control of the purse strings from those big spending nanny state Democrats, farm socialism is alive and well in America. The motivation for retaining these multiple layers of price supports, crop subsidies, and loan deficiency payments are not to preserve the jobs of small family farmers. The motivation here is to preserve the jobs of Republicans. This year’s pricey farm bill is old-fashioned tax, spend, and elect politics. Farmers, after all, tend to be concentrated in battleground states. So for self-preservation purposes, Republicans have generously turned the spigots back on. But $ 35 billion is a hefty price to pay. There’s just got to be a cheaper way to buy an election.
Stephen Moore is an adjunct fellow at the Cato Institute and president of the Club for Growth.
