Farmers Get New Subsidies, the Poor Lose Some Food Stamps
|February 7, 2014||Posted by Staff under Subsidies & Waste & Public Debt|
These four excerpts of 2014 on the new farm bill are from: (1) Weekly Wastebasket (Volume XIX No. 6), Feb 7, by Taxpayers for Common Sense; (2) WJHG, Feb 6; (3) The Public Opinion, Feb 7, by Paul Johnson; and (4) Southeast Farm Press, Feb 6, by Clint Thompson.
Sacred Cows Come Home to Roost
The trillion dollar Agricultural Act of 2014 (H.R. 2642) is the product of a long, non-transparent journey. The four Agriculture Committee leaders kept the public, and even their own committees, from influencing the backroom-written farm bill.
When you hide the work of Congress you get something like this bill – a Grade-A example of bipartisan binging. Three new programs send checks for dips in income.
Floor amendments that added to the cost of the bill — for example adding crop insurance policies for pennycress (a weed used in biofuels), alfalfa (cheap hay), and losses due to food recalls — made it into the final legislation. Cost-savings amendments that would cap overall spending on new shallow loss entitlements, eliminate the U.S. Department of Agriculture’s duplicative catfish inspection office (we already have one in the FDA), deny farm subsidies to city dwellers, and trim crop insurance subsidies for millionaires (an amendment that passed the Senate twice) were all abandoned. Oh, and a requirement that lawmakers and Cabinet Secretaries publicly disclose their crop insurance subsidies? Yeah they just couldn’t make that fit.
Congress Passes Federal Farm Bill
It’s been said that if farming were easy- everyone would do it. Those impacted by the 2014 farm bill say the new legislation certainly isn’t making the job any easier.
Think about the amount of risk a farmer is taking on — cost of seed and chemical and fuel, labor — land rent. Land rent is one that get’s left out of there a lot. Lots and lots of our farm land is rented land and that can be a very,very large cost.
President obama is scheudled to sign the farm bill into law by the end of the week. It’s good for 5-years.
Time to Calculate Production Costs
The costS of production have four big areas. Usually the two largest are land and fertilizer. Next is usually seed cost and from there machinery and its operation.
The two big ones with changes since last year are fertilizer prices and land rent. Both have seen changes over the past years. Fertilizer prices are down from 10 to 30 percent depending on when you got yours bought and could be higher by spring.
Land rent has increased but this is different for every farm depending on where they are on land rental agreements. But if you own your own land you need to figure the cost because you could rent the land out and get a return.
How Will the New Farm Bill Affect Land Rent?
Land rent has inflated over the past decade, and likely as a result of the direct payment subsidies. Landowners upped the rent to try to capture some, if not all, of that direct payment. So, it’s questionable if the farmer ever saw the money anyway.
With not as much money coming into farmers’ future incomes, will land rent remain inflated? Farmers will try to farm even more acres now than they did before to make up for the difference. That competition will keep land rent up.
Ed. Notes: Will these experts be proven right? Is there enough farmland now unused so that every farmer could farm more? And is every farmer not already maxed out farming as much as a 40 hour workweek allows? If farmers can’t find more land or more time, then they can’t compete and push up land rents. And if farm owners can’t find new tenants willing to pay more, and have their own costs to meet — perhaps a mortgage or taxes — then those owners will have to lower the rents that they charge prospective tenants. That means rents will fall, and the experts will have been proven wrong (once again).
Besides not helping working farmers, these subsidies actually hurt working farmers, by inflating price or rent of land. Inflated prices favor the deeper-pocket farmers who can gobble up land, leaving none for younger farmers just starting out. The resultant sprawling farms require heavy machinery and pesticides, an operation that lends itself to doing business with one big bank and one big buyer of harvests. Those are the businesses that get the lion’s share of the consumer’s grocery dollar, not an actual farmer or farmworker.
For taxpayers, the subsidies are costly and for consumers, food is not any cheaper. Worse, it is less nutritious. The farmers who get the handouts are factory farmers, not organic gardeners. So government largesse helps unhealthy food capture most of the market, leaving small niches for wholesome growers. Meeting less demand, they do not enjoy any economies of scale and can not cut costs and sell their produce as cheaply as the products of factory farmers.
The best help farmers could get, believe it or not, is a combination of land dues (or land taxes) with a Citizen’s Dividend (a rent share). Land is much, much cheaper in the countryside than in cities, so if land value gets shared thru-out the region, then country people will get a rent dividend fattened by steep urban location values yet live in a part of the region where land dues (or taxes) and the rest of the cost of living are low.
Further, if the government repeals its taxes on wages, then farmworkers — the hardest workers in all of agri-business — would in effect get a raise, and no one tilling the soil is more deserving. Hence the whole geonomic program improves the lot of everyone. In essence what it does is convert those land rents into residential dividends for everyone.