Farm Subsidy Bill Is A Fiscal Nightmare

Jim Matheson

While I have supported farm bill legislation in the past, I opposed the 2008 farm bill.
    This bill is a $289 billion bloatfest. In my opinion, both parties have forgotten the core values of fiscal responsibility and duty to the taxpayer when they voted this bill out of Congress.
    When farm subsidies were introduced in the 1930s, Secretary of Agriculture Henry Wallace called them “a temporary solution to deal with an emergency.” That emergency was collapsing farm incomes affecting 25 percent of the population then living on farms.
    Today, crop prices are soaring. Since the enactment of the 2002 farm bill, prices of the five crops (cotton, soybeans, corn, wheat and rice) that receive most of the farm subsidies have skyrocketed - some by more than 200 percent. Net farm income has more than doubled.
    Yet the new farm bill expands the $25 billion farm-subsidy system by raising payment rates and creating new subsidies.
    Who are the taxpayers subsidizing? Not the mom-and-pop family farmers struggling to stay on the land. These recipients are millionaires - commercial farmers who report an average income of $200,000 and a net worth of nearly $2 million.
    President Bush proposed limiting farm subsidies to those earning less than $200,000 a year, but that was rejected. This farm bill even repeals key payment limits, allowing some farmers to collect millions in annual subsidies. According to one farm subsidy database, the top 10 subsidy recipients - living in the metropolises of San Francisco, Phoenix, Memphis and Fort Worth - took in from $700,000 to $1.2 million in federal crop subsidy payments between 2003 and 2005.
    One reason crop prices - especially corn prices - are surging is our wrongheaded ethanol policy. Ethanol pulls up corn prices. We’ll be putting a third of our corn crop this year into ethanol - 90 million acres of agricultural land. Growing corn has never been so profitable.
    Besides inflating food prices, corn-based ethanol doesn’t make sense as an energy policy either, because producing it takes more energy than it returns. Yet the new farm bill includes a 45-cent-per-gallon subsidy for ethanol from corn.
    If we truly value using ethanol as a clean-burning fuel, why do we have trade barriers that prohibit us from importing cheap Brazilian sugarcane-based ethanol? This bill forces the U.S. Department of Agriculture to sell already overpriced, subsidized excess refined sugar in the marketplace into ethanol production.
    USDA has estimated that ethanol from sugar is twice as expensive to produce and could cost taxpayers as much as $4 billion or more.
    Under the pretense of meeting House pay-as-you-go budget enforcement rules, the farm bill is a sham. The Congressional Budget Office identified numerous gimmicks such as shifting costs outside the 10-year window and assuming that new nutrition and disaster-aid provisions will suddenly be dropped after five years to save money.
    In addition, PAYGO was circumvented by using the farm spending baseline from 2007, which allows for more spending, rather than the 2008 figure.
    The whole package reeks of back-room deals made to secure votes. No wonder the public is skeptical of what goes on in Washington, D.C. The 2008 farm bill is bad for taxpayers, bad for market-based agriculture, bad for grocery shoppers - and is seriously flawed public policy.
    At a time of budget deficits and high food prices, a bipartisan effort could have - and should have - produced better.
   
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    * REP. JIM MATHESON represents Utah’s 2nd Congressional District in the U.S. House of Representatives.

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