Farm Bill Follies - Congress avoids every opportunity to reform wasteful and outdated subsidies
The $300 billion farm bill is being cobbled together by Congress this week. As Senate Agriculture Committee Chairman Tom Harkin (D-Iowa) noted, "It's not just a farm bill. This is a farm and a food and an energy bill."
As Otto von Bismarck quipped, "Laws are like sausage. It's better not to see them being made." Let's take a look at these three aspects of this unappetizing piece of sausage.
First, what do the farmers get? Answer: A lot. Last year, net farm income reached a record level of nearly $89 billion due to high crop prices. Farm household income averaged $84,000 in 2007, according to the Environmental Working Group (the 2006 average for all U.S. households was $66,000).
Despite such good times, the federal government showered $5 billion in direct payments on 1.4 million farmers.
These direct payments have nothing to do with crop productivity or a safety net in case of low prices—they are basically gifts to farmers just because they are farmers.
In fact, farmers with gross incomes up to $2.5 million have been eligible for these payments. President Bush wants to cap that at $200,000 in income, but the House is considering a cap of $500,000, and the Senate voted to cap the payments at $750,000 per year in income.
Overall, Congress shaved just 2 percent off of the direct payments of $5 billion per year over the next four years. While this is a barely discernible improvement, one would think record high farm incomes combined with a world food crisis would make this a good time for Congress to scrap farming subsidies altogether.
http://reason.com/news/printer/126236.html
