Farm Owners Get the Royal Treatment in the EU and the US
|December 17, 2013||Posted by Staff under Subsidies & Waste & Public Debt|
These two 2013 excerpts on agri-biz subsidies are from (1) the BBC, Spt 26, by Chris Morris, and (2) Weekly Wastebasket (Volume XVIII No. 48) Nov 27, by Taxpayers for Common Sense.
Members of European Parliament Slam Funding Sofa Farmers
The direct payments to farmers – known as the Common Agricultural Policy (CAP) – make up most of the EU’s agriculture budget. Nearly 40% of total EU spending is allocated to agriculture.
The current payments system is largely based on land area and past subsidy levels, meaning that landowners like airports and sports clubs, which do not farm, have been getting subsidies on the basis of their grasslands or other eligible land areas.
Protection of wildlife and other environmental measures generally come under the rural development budget – called “pillar two”. Direct payments to farmers – “pillar one” – dwarf such spending and Europe’s big agricultural firms and landowners are major beneficiaries.
MEPs’ calls to set an upper limit on farm subsidies were rejected. Under the new deal, EU member states can transfer 15% of rural development funding to pillar one. But that can reach 25% in countries where direct farm payments are below the EU average.
The plan is to spend about 50bn euros (£42bn; $65bn) annually on agriculture in 2014-2020.
Gluttonous Farm Bill
As the USDA reported, net farm income for 2013 is set to be a record $131 billion. That’s 15% more than last year and, after adjusting for inflation, the best year since 1973.
Covering everything from loan guarantees for biofuels facilities and grants for drinking water wells to food assistance and crop insurance, the farm bill is a nearly $1 trillion buffet of special interest dishes. And it’s a spread that routinely costs more than expected – the last two farm bills are on pace to cost $400 billion more than was estimated when they were adopted. With our nation now $17 trillion in debt, the agriculture committees are being forced to change their ways.
One of the richest parts of the farm bill is the federally subsidized crop insurance entitlement program. Producers of everything from almonds to oysters receive taxpayer subsidies to buy insurance, not just on their crops, but also on the revenue they expect from those crops. It’s extremely (overly) generous, on average more than 60% of the premium is covered by taxpayers, and the program cost $14 billion last year – in a year with the best profits in more than a generation!
Ed. Notes: Why do governments subsidize farm owners? People need food, much more than other products which don’t get subsidies. How can farming be a losing business? How can real farmers and farmworkers make so little money while sofa farmers, lenders, seed sellers, tractor manufacturers, fertilizer & insecticide makers, harvest brokers, and shippers make so much money? If government stayed out of agriculture — no subsidies, no tax breaks — and just recovered the socially-generated ground rents then distributed them to citizens — would growing crops finally become a normal enterprise? Probably. And the organic, no-till farmers would probably profit the most.