Saturday, April 29, 2006; A16
FARM SUBSIDIES have risen from $8 billion in 1997 to a projected $22 billion this year. Farm earnings have risen, too. Net farm income grew from $36 billion in 2002 to a record $83 billion in 2004. Although that fell last year to $72 billion and is forecast to drop again in 2006, to $56.2 billion, that's still above the 10-year average.
But why let good news stand in the way of even more payments to farmers? The Senate is poised to add $4 billion in "disaster" payments to farmers as part of the emergency spending bill it's debating. A big chunk would go to farmers who have suffered no other disaster than the high energy prices that are hitting every other sector of the economy -- not to mention anyone who drives a car.
Under the Senate proposal, farmers who already receive cash subsidies for the corn, wheat, cotton or other crops they grow -- money they get when prices are high or prices are low, in good years and bad -- would get an extra 30 percent, at a cost of $1.56 billion on top of the $5.2 billion the government is already spending. Because payments are based on the size of farm operations, this would funnel the largest amounts to the biggest commercial farms; according to an analysis by the Environmental Working Group, just 10 percent of bonus subsidy recipients will collect nearly 60 percent of the money. More than 50 producers would collect an extra $100,000 or more. Meanwhile, 60 percent of the nation's farmers would get nothing under this program because they raise livestock or grow crops that aren't eligible for the subsidy.
Proponents of the spending point to droughts in Iowa, floods in North Dakota and wildfires in Texas -- calamities that have affected farmers there, they say, in much the same way Hurricane Katrina slammed those in the Gulf Coast. There are, no doubt, farmers who have suffered severe losses this year. Isn't that what crop insurance -- government-subsidized crop insurance, to the tune of $4.2 billion this year -- is supposed to be about? True, crop insurance doesn't cover all losses, but should farming be the nation's only risk-free enterprise? Besides, one of the theories behind the egregious 2002 farm bill was that it would, at least, provide generous enough payments year in and year out that farmers wouldn't need emergency bailouts.
The administration is right to oppose this provision; the Senate ought to show enough discipline to take it out. Don't count on it, though. On Wednesday, Senate Majority Leader Bill Frist (R-Tenn.) touted a letter to the president, joined by 35 of his colleagues, pledging to sustain a threatened veto if the spending package exceeds the administration's requested $95.5 billion. That same day, the Senate voted by a veto-proof 72 to 26 against removing the farm spending and other provisions from the bill -- current price tag, $106.5 billion.