I love the family farmer. I also love the mom-and-pop diner, the corner grocer and the plumber who brings his nephew to my home to teach him the trade. I'm not sure these jobs are any less noble than the family farmer's, but in his name, every American household spends $500 per year to subsidize agriculture.
Although the preservation of small family farmers is the rationale for federal farm programs, such farmers are not in fact the primary beneficiaries of them. A disproportionate amount of federal subsidies goes to large, wealthy farmers. Family farmers who grow vegetables or fruit, raise cattle or pigs or are farming the 70 percent of U.S. crops that are not covered by federal farm programs do not receive subsidies. In 1988, 43 percent of farm payments went to farm operators with an average net income of $96,000 per year and average net worth of $804,000. They average over $60,000 in government payments.
Agriculture Deparment data suggest that this generous subsidization becomes the "bonus" with which large agricultural landowners buy out their smaller neighbors, and that federal subsidies exacerbate rather than curb the trend toward farmland consolidation.
Under the 1990 farm bill, scheduled for debate in both houses of Congress this week, Americans will pay doubly over the next five years for the vast array of subsidies, marketing orders and import barriers contained in the bill. They'll pay first in taxes and again every time they go to the store.
In the 1985 farm bill, the government awarded an average of $17.6 billion annually in federal payments to farmers, and restricted agricultural production in order to create an artificial scarcity in commodities that cost consumers an additional $12 billion per year in higher food prices, according to USDA's Economic Research Service.
Today's advocates of farm programs observe correctly that U.S. consumers pay the lowest percentage of their income for food and enjoy the most stable food supply in the world. However, they incorrectly attribute this happy condition to farm policies rather than to America's position as the country with the highest disposable per-capita income combined with the native productivity and resourcefulness of American farms and farmers. They miss completely the extent to which American agriculture could improve conditions even more if its full productive capacity and the 60 million acres of farmland set aside by government policies were fully utilized.
Farm policies are a unique government war against the innate productivity of American farmers, and they are in desperate need of reform. They function as if the government were to pay Detroit to shut down auto factories in order to drive up the price of cars. It's absurd. In America we don't pay miners not to mine, and we shouldn't pay farmers not to farm.
This year's debate represents the first time a bipartisan coalition of lawmakers -- the Coalition for Common Sense Agriculture Policies, of which I am cochairman -- will try to reform the farm bill with the interests of consumers, taxpayers and small farmers in mind. Some of the amendments to be offered by the coalition are:
Eligibility Requirements. Rep. Charles Schumer (D-N.Y.) and I will offer an amendment to bar individuals with adjusted gross incomes of $100,000 or more from pocketing federal farm payments. Passage of this legislation could save up to $900 million annually, although it would affect less than 3 percent of all those receiving farm income support payments. Most of these subsidy recipients are not full-time farmers at all but landlords or investors in farm operations. On average, farm income makes up only 4 percent of their total adjusted gross income.
Sugar Price Supports. Reps. Tom Downey (D-N.Y) and Willis Gradison (R-Ohio) are seeking to reduce the support level for domestic sugar from 18 cents per pound to 16. The effects of favoring sugar producers have been to inflate the domestic price of sugar at an enormous cost to consumers, stimulate increased production that bears little relationship to market demand and restrict foreign producers' access to our markets. This last effect has worked against our own national interests in the Caribbean and Central America, and has violated our international obligations under the General Agreement on Trade and Tariffs.
Payment Limitations. Rep. Silvio Conte (R-Mass.) is offering an amendment that would eliminate loopholes in existing provisions that were supposed to limit government farm payments to $50,000 per individual. Unfortunately, large producers have been able to extract up to $100,000 in deficiency payments under current law.
The Peanut Program. Peanuts are the most controlled food crop in U.S. history. The peanut industry was frozen in place back in 1941, when the government granted quotas to those growing peanuts. These quotas have been handed down over generations, an American agricultural birthright. Generally speaking, if you do not inherit one or buy or rent the right from someone who did, you cannot grow and sell edible peanuts to your fellow Americans. Americans now pay twice as much to eat American peanuts as foreigners do, and spend $553 million per year more on peanuts and peanut products than they would without the quota system. Rep. Andy Jacobs (D-Ind.) and I would amend the farm bill to reform this system.
The writer is a Republican representative from Texas.