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Willingness to cut the budget means it’s time to revisit food subsidies

BY DI EDITORIAL BOARD | JUNE 23, 2011 7:20 AM

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With a looming federal deficit and bipartisan support for fiscal restraint growing in Washington, it’s become clear that now is the best possible time to implement substantial agricultural reform. But don’t worry; it’s not as bad as it sounds.

Over the past decade, it’s become increasingly clear that traditional farm subsidies have not lived up to their true purpose and, ultimately, have become bloated agribusiness interests. This isn’t just the sentiment of small, urban circles, either; in fact, it’s starting to come from lawmakers representing Midwestern farm states: “We shouldn’t be giving corporate farms, these large agribusiness companies, subsidies. I strongly believe that,” Rep. Paul Ryan, R-Wis., told reporters in Washington last month. Even Sen. Charles Grassley, R-Iowa, has admitted that agriculture funding, as is everything else, is destined for a reduction.

This reduction should come in the form of a complete overhaul; subsidies should support small farmers, nutritious crops, and environmentally friendly practices.

As with other well-meaning government programs, agricultural subsidies rose to prominence during the Depression as a way to keep American farmers financially solvent. By stepping in, the federal government enabled the mass production of commodity crops while also allowing farmers to maintain their livelihood.

But, like so many government subsidies today, farm aid has grown out of control. Rather than providing money based on economic need or innovative thinking, subsidies are a guaranteed form of profit for those producing. Last year alone, nearly $5 billion in direct payments, a subsidy paid regardless of necessity, were made by the U.S. Department of Agriculture. Worse still, according to the Environmental Working Group, a nonprofit advocating for agricultural reform, more than 44 percent of the subsidies paid to Iowa farmers in 2009 went to the top 10 percent of earners.

“The need for government support is due to volatility in the market and weather,” Don Petersen, the director of government relations at the Iowa Farm Bureau, told the DI Editorial Board Wednesday, citing the historical importance of agricultural subsidies to Iowa farmers. And while he acknowledged that Iowa farmers understand the state of the national budget, “it’s important they don’t be singled out.”

We support agricultural subsidies in and of themselves. As both a fail safe and way of promoting progressive thinking, government support and investment in agriculture carries the propensity to provide positive effects. Unfortunately, current policies in place are neither the product of economic necessity nor an attempt to incentivize valuable products of the agricultural industry.

One mustn’t look any further than corn subsidies to understand the ineptitude of the current system. Corn has been a growing monstrosity for American taxpayers since the late-1990s. In 2009 alone, taxpayers provided nearly $700 million in farm aid to Iowa corn growers. It’s little wonder, then, that so many of our daily products incorporate high fructose corn syrup in their ingredients — and that corn-fed meat, much of it raised in unhygienic conditions, is artificially cheap.

Instead of the current agricultural structure, farm aid should prioritize agriculture that is beneficial to the state of Iowa.

Consider the possibilities if subsidies were reallocated from corn. Growers would be encouraged to experiment with new planting models and crops. Not only might this dramatically reduce the amount of corn syrup in our diets, it may also bring other more environmentally friendly crops to the field. But with the current agriculture program, there’s simply no reason to switch.

Farmers who do try to switch run into massive bureaucratic headaches and stonewalling; if they try to grow vegetables on commodity crop acreage (that devoted to soybeans, corn, rice, wheat, or cotton), they can lose their subsidies entirely. These subsidies would not be lost if the farmers refused to grow anything; in effect, farmers are paid to leave their land barren rather than grow fruits and vegetables.

The solution is simple: Emphasize smaller growing operations in conjunction with adopting new guidelines, such as capping the amount an individual may receive in aid per year or tightening the eligibility limit, as was recently voted down in Congress. Offer greater subsidies to farming productions that practice sustainability, including crop rotation, use of wind and solar energy, and erosion minimization. Prioritize crops that may alleviate America’s twin crises of obesity and malnutrition rather than crops that contribute to the problems.

Any talk of reforming farm aid will bring up the issue of global food supplies; big agribusiness argues that without the U.S. subsidies, the world would starve. However, numerous organizations including the National Center for Policy Analysis and the (admittedly libertarian) Cato Institute have cited current USDA subsidies as barriers to economic growth in developing nations. Absurdly cheap corn and wheat, combined with massive free-trade agreements, price out unsubsidized farmers in developing countries and bar them from crop production.

These reforms to agriculture need not be painful. And while they may take some time getting used to, if implemented effectively and responsibly, they can help prepare Iowa farmers for the road ahead.


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