The best way to grasp the absurdity of our farm programs is to ask: Would we create these programs today if they didn't already exist? Would we force Americans to pay twice the world price for sugar? Would we decide to give dairy farmers $650 million a year to produce milk we don't need? Would we fatten the budget deficit by paying $5 billion a year in subsidies to wheat, feed grain, rice and cotton farmers? It would require enormous gall for anyone to propose these outlandish and costly ideas.
The absence of any compelling need for farm subsidies is obviously not important. Congress is now cheerfully extending the farm programs for another five years even though it could not conceivably justify the same programs if they were new. The legislation breezing through the House and Senate will cost taxpayers an estimated $50 billion to $60 billion between now and 1995. Retail food prices will be artificially raised by at least $10 billion annually. Yet, there's been barely a peep of public outcry.
You can partially explain this by the inertia of politics. Once in place, even the most worthless programs are hard to kill. They become encrusted in a cocoon of constituents, well-organized lobbies and powerful politicians. But farmers also tug at our emotions, and there are always a few celebrities (the Willie Nelsons and Jessica Langes) loudly mourning the vanishing of the family farm. All these plaintive wails obscure what's really going on: a mad scramble to squeeze private gain from the public.
We have been at this for more than half a century -- long enough to know that most of the reasons customarily advanced to justify these programs are wrong. Government subsidies clearly aren't needed to ensure the steady flow of food to market. Indeed, only about two-fifths of farm products receive substantial subsidies. These include the major feed grains, dairy products, peanuts, rice and sugar (sugar is protected mainly by tight import restrictions). Somehow, everything else -- beef, chicken, eggs, pork and most fruits and vegetables -- gets produced, processed and delivered without subsidies.
The idea that government policies preserve small family farms is an even bigger myth. Between 1935 and 1989, the number of farms dropped from 6.8 million to 2.2 million. Even continuous government subsidies couldn't neutralize basic changes in technology -- more mechanization, better seeds and more fertilizer -- that reduced the need for farm labor and made for bigger farms. By and large, this upheaval has been a boon to both consumers and farmers. Fewer farmers feed us better at a lower cost. In 1960, Americans spent 20 percent of their disposable income on food; today, that's 14 percent. Between 1955 and 1989, the number of dairy farms dropped from 2.8 million to 205,000, and the number of dairy cows from 21 million to 10 million. Yet, total milk production rose a fifth because each cow now gives 144 percent more milk than in 1955.
The loss of so many farms has involved much personal anguish but also has allowed people to live better. A half century ago, there was a vast gap in incomes and living standards between farms and cities. Now there isn't. Many vanished farms provided only a meager existence in exchange for grueling labor. The survivors are still mainly family farms, but they are big family farms. In 1989, half of all the farmland was owned by the 15 percent of farms that have sales exceeding $100,000. These are the farms that receive most subsidies. In 1989 nearly 60 percent of subsidies went to the wealthiest quarter of farms. The remaining farms are often run by part-timers who have other jobs (half of farm income comes from nonfarm sources).
Whenever Congress tackles farm legislation, farm groups are routinely described as being "on the defensive." What a joke! The public pays scant attention to the debates, and neither political party pushes for an outright end to subsidies. A few renegades (Republicans and Democrats) scream with little effect. In last week's debate, amendments were offered in both the House and Senate to trim the price support for sugar from 18 to 16 cents a pound, a trivial cutback. The proposals were rejected 271 to 150 in the House and 54 to 44 in the Senate.
The newest version of the "farmers on the defensive" story is this: the budget summit and a new global trade agreement will ultimately force reductions in subsidies. By this logic, Congress is simply going through the motions of extending the farm programs. Later, cuts in farm subsidies will be included in the larger packages to decrease the deficit and to approve new trade measures. So members of Congress can -- by this reasoning -- loudly flaunt their pro-farm sympathies now and then quietly renege later.
There may be a scintilla of truth in this, but mostly the argument is backward. By cutting farm subsidies now, Congress would improve the prospects for a major package to reduce the budget deficit. The same is true of trade. The more Congress subsidizes our farmers, the less seriously other countries (mainly the Europeans) take our demands to cut their own subsidies and import barriers. As a result, any trade liberalization is likely to be modest. Because U.S. farmers have more to gain than to lose from freer trade, their long-term interests are being sacrificed to their short-term addiction to subsidies.
Given the hardships of ending any addiction, there's a practical case for phasing out subsidies over, say, five years: farmers should have time to adjust to change. But there's no case for continuing the subsidies indefinitely. The economic health of American farmers has improved vastly since the early 1980s when they suffered the aftereffects of double-digit inflation and overborrowing. In 1989, farm profits (adjusted for inflation) were twice as high as they were in 1980.
Who cares? No one, really. The farm lobbies are effective because they operate in a climate of public indifference and, indeed, benevolent tolerance. Americans somehow consider farmers, as a class, more deserving than ordinary people. They do "real" work and evoke our past of rugged individualism. We want to be reconnected to our roots. Even in an era when government faces many pressing needs -- and pressures for new taxes -- we are willing to pay a high price for nostalgia.