BY ANY reasonable measure, the current system of federal support for agricultural is a scandalous misuse of taxpayer dollars. In fiscal 2010, the federal government spent about $5.1 billion on payments to commodity producers — regardless of need — and another $13 billion on “counter-cyclical” aid, heavily subsidized crop insurance and “disaster” programs. Most recipients were far from poor. The payments distort markets and antagonize our trading partners while encouraging wasteful farming.
If there were ever a time to eliminate them for good, now would be it. Farm income, buoyed by high prices and strong exports, is projected at a record $137 billion for fiscal 2011. Meanwhile, the country faces a dire, long-term deficit. Reflecting these new realities, the budget drafted by House Republicans last spring called for $30 billion in cuts in the next 10 years; last month President Obama proposed $33 billion in net savings to the House-Senate budget supercommittee.
Yet there are signs the political will may be fading.
There remains no “daunting” challenge faced by U.S. agriculture and there never has been a compelling economic argument for farm subsidies. Like so much beltway rhetoric, it is political speak without roots in economic reality. These subsidies should have been cut from the budget yesterday. Unfortunately, unless Washington, especially the Democrats, is serious about cutting wasteful spending, they are probably here to stay.