Thursday, April 7, 2011

RIEDL: Farm subsidies ripe for reform

Defenders assert that the $25 billion annual cost of farm subsidies (a bit less than 1 percent of federal spending) is too small to bother reforming. Yet one-third of the federal budget — $1 trillion total — consists of programs that each cost $25 billion or less.

The average farmer earns more than $83,000 annually (nearly 20 percent above the national average), according to the Department of Agriculture. Commercial farmers, who receive the majority of subsidies, report an average net income of $170,000, and a net worth close to $1 million. And despite past attempts to limit subsidies to millionaire farmers, the last farm bill actually repealed key payment limits.

The farm economy is booming. Farmers dealing with higher energy prices are also benefiting from soaring prices of wheat (up 81 percent in the past year), corn (up 59 percent) and soybeans (39 percent). Consequently, 2011 net farm income is forecast at 52 percent above 2009 levels.

Farm subsidy advocates often respond that farms could not survive without large subsidies. Nonsense. Producers of just five crops — wheat, cotton, corn, soybeans and rice — receive nearly all farm subsidies. In fact, only one-third of the $390 billion in annual agricultural production is directly subsidized. All other farmers — including growers of fruits, vegetables, livestock and poultry — receive nearly nothing.

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