Skip to comments.Big Agriculture: The Queen of Corporate Welfare
Posted on 06/11/2012 5:59:43 AM PDT by Kaslin
Tea Party-minded Congressmen and ideological leftists tend to agree that corporate welfare is bad. Hence, conservatives and liberals recently teamed up to oppose adding $40 billion in loan authority to that bastion of crony capitalism, the Export-Import Bank. Unfortunately, the establishment types in both parties combined to push the extra spoils for Ex-Im through to passage.
Now an even bigger corporate welfare bill – the Farm Bill—is moving through Congress, and it’s garnering even broader support.
Every five years, the House and Senate take up a farm bill. The House is still working up details on its version. S.3240, sponsored by Sen. Debbie Stabenow (D-Mich.) is pending in the Senate. Comically misnamed the Agriculture Reform, Food, and Jobs Act, it is terrible.
Stabenow’s bill would dole out subsidies—most of them lasting five years—to numerous slivers of the agriculture sector. It enjoys strong bipartisan support because the plethora of subsidies spews big money into large swaths of the country. The Congressional Budget Office (CBO) estimates this bill will cost taxpayers $969 billion over the next 10 years.
The CBO report goes on to say that the bill will actually save taxpayers $24 billion. Unfortunately, that’s not the case. The CBO is required to use base its analysis on current—severely bloated—federal spending assumptions. Not only that, but Stabenow’s cuts are offset by a new “shallow loss” program that could easily end up costing more than the proposed “cuts” save. As Sen. Jim DeMint (R-S.C.) observes, Stabenow’s bill actually constitutes a massive increase in spending over the 2008 Farm Bill.
“The 2008 Farm Bill was estimated to spend $604.1 billion over 10 years, as calculated by the Congressional Budget Office,” DeMint notes. “The 2012 Farm Bill is estimated to spend $969.2 billion over the next 10 years. That’s a whopping 60 percent increase!”
Another interesting aspect of this bill: The bulk of its spending—more than $750 billion over 10 years—is wrapped up in the Supplemental Nutrition Assistance Program (SNAP), also commonly referred to as the Food Stamp program. So while the Congressional debate may seem to be over agriculture policy, the real issue is how to fix a broken Food Stamp program that has become little more than a massive subsidy for agriculture interests. Although food stamp recipients don’t buy directly from farmers, farmers and the welfare lobby do work together to increase leverage for passage of this bill.
According to The Heritage Foundation’s Rachel Sheffield, “Since 2000, the number of Americans on food stamps has jumped by roughly 260 percent, to 44.7 million in 2011. During that same period, government spending on food stamps nearly quadrupled, to $78 billion last year.” In just the last three years, Food Stamp spending has doubled.
One problem with the program is that the National Restaurant Association is pushing states to let recipients use Food Stamps to purchase prepared foods. Since prepared foods cost more, expanding the program this way adds more pressure for increased spending . The Sioux Falls Argus Leader reports, “The main goal of the nation's food stamp program has been to supplement the buying power of low-income residents when they shop for unprepared foods at grocery stores. But a major restaurant company is lobbying the federal government on the Supplemental Nutrition Assistance Program, federal lobbying records show.” There is no shortage of lobbying interests trying to hop aboard this corporate welfare gravy train.
Another programmatic problem: States have a built-in incentive to bulk up on Food Stamp participants. The more participants they have, the more money they get from the federal government. Many states are ignoring work federal work requirements to pad their assistance rolls, helping drive up Food Stamp spending.
Some of the increased participation can be attributed to the current recession, yet most of the increases can be traced to states and corporate interests seeking a bigger slice of the federal money pie. President Obama heaped Stimulus money on food stamps while also easing eligibility requirements further complicating efforts to reform the program.
On the Senate floor last week, Sen. Jeff Sessions (R-Ala.) added some well-needed perspective when he noted that the Farm Bill would spend $82 billion on food stamps next year, while the feds will spend less than half than--$40 billion—on roads and bridges. The Food Stamp program is in dire need of reform.
I’ve heard from many a farmer that the direct subsidies are their margin. Then this goes up the line to the land banks who loan the money for land and operating credit and this goes up the line to the banks that lend them the money and even the big ag suppliers. Great while its in expansion, but in the last few years it blew up into a bubble IMO bigger than the 70s, and bubbles always burst.
There are farmers and their are ranchers. Both produce the food we eat. Farmers have been receiving subsidies for years. Ranchers annually lose livestock, to various causes. The difference being that ranchers do not enjoy the benefits of subsidies, that increasingly benefit large corporate farm operations.
When I first moved to Western Kansas, I knew it was real farming country. All the TV and radio stations catered to the farmers but something else surprised me.
Just about everyone who wasn’t in the farming business did not care for the farmers. A typical story would be that they complained all the time about the Government while at the same time getting huge government subsidies.
Also that they complained how no one could make a living farming while driving new Cadillacs, Lincolns, and top of the line 4WD pickups.
I actually got to liking them OK as they all were gun enthusiasts and I belonged to a gun club with many of them. One day I brought to the shooting range a strikingly beautiful Argentine Model 98-09 Mauser made by Deutsch Waffen und Munitionsfabriken. It was unfired when I got it and was the finest made rifle I have ever owned.
A couple of them looked it over and read the inscription in German then began laughing and speaking German to each other. I thought it was amazing that these guys families had probably been in America since the 1890s yet they could still speak German fluently.
They need to stop this program and let the free market work, but of course the socialists in both parties will not allow this to happen. Fascism at it’s finest in America.
I believe that when this ends, food will skyrocket to what it actually costs to produce. It is one reason we moved from Seattle to rural central KY last year. This is our first year with a large garden. We expect a so-so crop (plenty of tomatoes, potatoes and zucchini) but we really are getting the soil ready for the winter crop and next year.
We expect growing your own food to become financially beneficial by then, and obviously the quality is better.
Our twelve hens should start laying by August too.
“Ive heard from many a farmer that the direct subsidies are their margin.”
You know that little bridge in Brooklyn, it’s for sale again.
Ever heard of WIC? It is there to supply milk for mothers with very young children. I was at the dairy section of Wal-Mart yesterday and the fairly expensive, flavored non-dairy creamers for coffee had a label that said, “wic approved”.
The whole government welfare thing, from all levels, is a joke. It is coming to a head because they have run out of Other People’s Money.
To compare people who work hard with welfare slugs and parasites is beyond the pale. Show me a company that moves to any city that doesn’t receive some tax benefit. The left invented the term “corporate welfare” to attack any business that got to keep some of their tax money.
It seems the net result of government subsidies to farming over the years has had the predictable effects of.....
socialized stigma against racial minorities.
Fascist collusion between aggricultural-business and government to the detriment of the small family farmer.
Increased government control and regulation.
The international dimension is also important. U.S. farmers sell into global markets. Most of the rest of the world is far more protectionist, and most countries subsidize their famers far more heavily. This is all very much on the table in the long-stalled (probably dead) Doha Round of talks. U.S. agriculture is a dominant player internationally, and we want to keep it that way.
But they don't own them, the LLC Farm business owns them.
They get to use them 24/7/365, but the business owns them, and pays every dime of the costs. Ya see?
I've never known a farmer that owned a lawn tractor or ATV, but I've also never known one that didn't ride the very top of the line of both.
I know lots of farmers and like them, but they work the system like everyone else that owns a business.
You conflate the two. Keeping your tax money is often called a subsidy by liberals, a “cost” to the City or State - but it is not.
If Springfield wants to give a tax break to people who want to film a movie in Springfield it is not a payout of government funds to a movie studio - it is them declining to collect taxes at as high a rate as the law would otherwise dictate - in order to attract the business that otherwise might go to ‘Shelbyville’.
Farmers are paid direct subsidies - not merely given tax breaks. Shame on you for attempting to conflate the two out of intent to deceive or ignorance.
Today we subsidize farmers because they must compete with offshore food producers. However, if we don't preserve our know-how then we could end up with some very deep regrets on down the road.
Every time I read these stories about waste and subsidies I’m convinced ten average American small business owners could in 24 hours take the detail of the federal budget and produce a balanced budget. Instead we spend a billion dollars for Congress, its staff members, and consultants who do nothing more than keep adding to the debt.
The House Republicans elected in 2010 have not balanced the budget even though they have control of spending per the Constitution. If elected Romney isn’t going to balance the budget, he will “tinker” around the edges. The web woven by special interests is too strong.
At this point in time it appears the only way out this out of control spending mess is for a collapse of the entire system and the US government to lose its ability to borrow. The dictator who takes charge will have no choice but to balance the budget.
You best check your stats. It is not a one time deal. Example for my location: IBM moved here and got tax cuts for 10 years, lease on a monstrous building at $1/year for a decade, free new infrastructure to allow traffic flow, and the list goes on.
Don’t get me wrong: I have no problem with across the board cuts all business, but to single out farmers because they are non-union and small, is not a game of cricket.
For the record: the entertainment industry is the most overpaid, overpraised “industry” on the planet. Nice of you to compare the marketers of deviance and depravation to the suppliers of the cheapest and safest food on the planet.
A tax break is a tax break.
A subsidy is a subsidy.
They are two different things.
Despite your shameful attempt to conflate them.
You are forgetting that we only have the House, and to get the results we want we need the entire Congress, which is the House and the Senate
April 23, 2009 was the last time that the democRat controlled Senate has passed a budget.
Taxpayer funds are taxpayer funds: I don’t care what name you put on them. The tiny fraction farmers get is a pittance compared to most. Keep in mind Ag infrastructure value is in the trillions and use your calculator. There are more than 2 million farms in the country encompassing a land mass of more than a billion acres.
The dirty little secret are all the “farmers” who live large in urban America on the government payments from the fallow farmland that they own in rural America. The payments for the fallow land are large enough to abandon the farm and move to the city and live. It is bought and sold by people who never intend to farm the land, just own it for the government payments.
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