Yes, Slash Farm Subsidies -- but Don't Stop There
Thanksgiving is behind us. The fiscal “cliff” looms ahead. And in less than six weeks, Massachusetts will have a new senator. Let's try to link them all in a single column.
As a candidate for the US Senate, Elizabeth Warren showed a livelier interest in raising federal revenues than in cutting government spending. But about one spending target the senator-elect has been admirably blunt. When asked to name some items in the federal budget she'd like to see slashed, the first program she cites is one of the most indefensible: agriculture subsidies.
To be sure, it's easier to oppose welfare for agribusiness when you represent Massachusetts, which ranks 44th among the 50 states in federal farm payments, and where only 7.7 percent of local farms collect subsidies. But that doesn't alter the fact that farm subsidies are egregiously bad policy in every way, and Warren will deserve hearty bipartisan applause if she leads a serious effort to eliminate them.
According to the Environmental Working Group, agriculture subsidies have robbed taxpayers of more than $275 billion over the past six years. Like most corporate welfare, farm programs redistribute wealth upward. In congressional testimony last June, Cato Institute analysts Chris Edwards and Tad DeHaven pointed out that the average income of farm households was $84,400 in 2010, or 25 percent higher than the average income earned by all US households that year. Moreover, the great majority of American farms (62 percent) collect no subsidies at all. Nearly 75 percent of government payments go to just 10 percent of all farm businesses.
For years critics have pointed out glaring problems with the government's farm program: The tens of millions of dollars paid annually to recipients who are millionaires. The more than $1.1 billion disbursed to people who were dead – in many cases, dead for years. The damage inflicted on the environment, and on farmers in poor nations.
Then there are the lavish “farm” subsidies shelled out to owners of land not used for farming at all. In some communities, ABC News reported in 2008, real-estate agents were using the prospect of agriculture payments as a lure to entice home buyers. “Do you have to farm … to receive it?” one woman was shown asking a realtor during a home showing. “No, no, no, no,” the agent assures her. “It's like a little bonus that you don't really have to do anything to get.”
US agriculture doesn't require tax dollars to flourish. The proof was on your Thanksgiving table – and in the grocery where you stocked up before the feast. Most varieties of food grown in America aren't subsidized, as ABC's reported noted. There's no apple subsidy, no banana subsidy, no subsidy for carrots or lemons or lettuce. Yet walk into any supermarket and you can find all of them in abundance.
The case against farm subsidies is clear and compelling. Most Americans rightly oppose them, and Warren rightly calls for ending them. Granted, that wouldn't make more than a small dent in the $1 trillion annual deficits Washington has been running. But it would make a good start. And wiping out all the other corporate welfare in the federal budget – the equally indefensible subsidies for high-speech rail and alternative energy, for automakers and broadband networks, for small business and mortgage lending, for export promotion and shipbuilding – would make an even better one.
Yet earnest talk about cutting the budget never seems to lead to earnest budget-cutting. Every subsidy has its vocal defenders, every taxpayer has his favorite subsidies, and no matter how much evidence piles up to the contrary, Americans continue to believe that government spending is essentially virtuous. No political truth seems harder to bear in mind than this one: Every dollar the government gives to X is a dollar the government must take from Y. Yet no political truth is more ironclad.
We are beguiled by what political scientist James Payne calls the “philanthropic illusion” – the idea that the government has money to bestow on needy people and worthy causes. It doesn't. Washington is not a source of wealth, and its subsidies are not largesse.
It is heartening that Massachusetts' senator-elect can brush aside the philanthropic illusion when it comes to crop supports. Here's hoping she comes to see that what is true of Washington's farm programs is true of every budget item: Government can only help some by hurting others.
(Jeff Jacoby is a columnist for The Boston Globe. His website is www.JeffJacoby.com).