Americans say it’s time to tighten our spending belts – surely they won’t include agriculture!?
By Brandon Souza – It’s hard to avoid the discussion of money in America these days. Taxes, government spending, fraud, corporate greed, cost of living, 99% vs 1% – so among all the conversations, do you think anyone will bring up the idea of cutting farm subsidies? After all, we’re talking $20 billion dollars this year, not exactly chump change. Yes, farm subsidies are a sensitive subject. But hardly a new one.
Help for Agriculture in a Slow Time
Starting in the 1920s and 30s, a series of government acts were passed to offset the ravages of a failing economy and the Great Depression – sound familiar? The 1922 Grain Futures Act, the 1929 Agricultural Marketing Act and the 1933 Agricultural Adjustment Act all came to be at a time when approximately 25% of the country’s population resided on farms and many Americans felt that agriculture couldn’t afford to fail. So the government stepped in to help.
The years progressed and while farms became more efficient and consolidated, agricultural residency shrunk to the current 2% of the total US population. But the subsidies didn’t shrink. They now equate to an annual assistance program that costs the U.S. government (us) tens of billions of dollars annually. One might think that given agriculture’s incredible technical advances we could at least talk about change. But that kind of talk meets with resistance.
Please Spend Less, But Not on the Farm
Today, most (though not all) farmers and agribusinesses are big proponents of less government intervention, often doling out scathing opinions on the wasteful spending that takes place in Washington. Ironically, they’re also among the first to defend crop subsidies. $500,000 of federal funds to build a park on the side of the interstate? Heck, no. $500,000 to make up the difference on their balance sheet? Heck, yes.
Like many dependencies, this one won’t end quickly or simply.
Economic Viability and National Security
Proponents argue that crop subsidies are vital to the ongoing success of the agricultural industry in America and the security of our food supply. True, but only in part. More than 90% of crop subsidy money goes specifically to corn, wheat, soybeans and rice. Hundreds of other crops receive little to no support. They are at the mercy of the free market, yet they thrive – proof, perhaps, that agriculture can exist without government funding. But do we have the ability to wean off assistance without shocking the market so badly that farmers take a devastating hit?
It’s Time for Policy Change
Today, the merits of government support are at a crossroads of irrelevance – agriculture is part of a new economic age and an economy that will not bounce back anytime soon. Understand that and you understand that agriculture subsidies are not immune to nationwide debate.
Some organizations, such as the National Corn Growers Association, have stepped up to the plate to provide ideas that will replace existing functions like the Average Crop Revenue Election Program. Kudos to the NCGA – because even if there are some disagreements on their proposal, at least they’re moving the conversation forward.
What’s next? With the recent failure of Washington’s Super Committee, ag spending faces a $15 billion cut over the next nine years as part of deficit reductions.
In 2012, let’s all work to move the discussion on farm subsidies towards viable, amicable solutions – devoid of finger pointing and special exemptions. The problem isn’t going away. We need real solutions to help solve it.