Chambliss, Lincoln fight farm cuts

U.S. Sen. Saxby Chambliss (R-Ga.) is working with Sen. Blanche Lincoln (D-Ark.) to fight the Bush administration’s proposed cut in agriculture spending by $18 billion over the next five years. But Chambliss is treading on some very unfertile ground.

The Bush administration’s plan would cost $87.3 billion over the next five years, not counting food stamps and other nutrition programs, compared with $105 billion spent on farm programs over the past five years.

Most payments go to growers of five major crops – corn, soybeans, wheat, rice and cotton.

Lincoln said many nations oppose subsidies for U.S. farmers, arguing that it makes trade between countries unfair. Lincoln said the U.S. market is open to foreign agricultural goods, but that “changes must occur in places other than just the United States.”

The United States needs to deal with trade issues with foreign countries before cutting subsidies to U.S. farmers, Lincoln said, because otherwise the United States wouldn’t have any leverage to negotiate.

Under the Bush proposal, anyone making more than $200,000 in adjusted gross income wouldn’t be eligible for farm payments. The cap is now set at $2.5 million.

I know it makes me unpopular in Georgia, but the free trader libertarian in me staunchly despises most farm subsidies. The problem is that these programs have been sold as assistance for the “little guy,” when in reality, they overwhelmingly benefit large farms who, in turn, buy out small farms.

There is absolutely no reason that the Federal government should be unfairly subsidizing the destruction of the small farmer. The new, lower cap in the Bush Farm Bill helps filter out a lot of the huge farms receiving unnecessary funding.

And with a burgeoning Federal debt, the proposal would cut nearly $20 billion in out-of-control spending.

Here’s a pretty good breakdown on the president’s Farm Bill proposal from the Capital Press.

Johanns said anyone earning $200,000 is among the 2.3 percent richest Americans and that he would have a hard time justifying to urban taxpayers subsidies to such high earners.

10 comments

  1. Thig says:

    What about the farmer that is just trying to downsize or semi-retire? The way I read this, there are no exceptions from the $200,000 AGI rule. What if he sells some of his land or equipment to pay down debt and has a large capital gain? Shouldn’t the sale of farm assets be exempted from this rule?

  2. Rick Day says:

    This is is only the third thing GWB has muttered that I support (going to Mars and linking CEO bonus to performance were the other two).

    Back in ’00 I predicted GWB would not come up with 6 things I could even remotely support.

    We are half-way there, sir!

    Kudos to: small gummit” Republican Chambless for supporting mega-corp welfare in GA.

    PS: Thig – there is a difference between a farmer and a food manufacturer. A farmer works and is motivated mostly by their love of the land. As long as there is food on the table and a solid house to sleep in, most real farmers are quite content with working the land.

    Anyone else is merely working land for the millllions in profit, not for the love of the land. Therefore, I can not find any words to support your caveat.

  3. jsm says:

    I support Bush on this. It’s refreshing to hear at least something about spending cuts. Any move back toward a free market is good. Chambliss has been behind these farm subsidies all along, and he has used them to position himself as a “friend of agriculture.” He needs to be a friend to taxpayers–all of us.

  4. Adam Fogle says:

    Chambliss has been behind these farm subsidies all along, and he has used them to position himself as a “friend of agriculture.” He needs to be a friend to taxpayers–all of us.

    In all fairness to Sen. Chambliss, farm subsidies are big business in rural areas. The majority of non-small-farmers and big farms support them – be it out of sheer ignorance or for financial gain.

    So Chambliss is in a tough position in which it is very risky to come out against farm subsidies.

  5. Groseclose says:

    Adam, with this post, you have certainly delved into a complex subject and for that, I appreciate your post. The agriculture community has for too long focused on merely selling Members of Congress on their position on farm payments and has forgotten that the long-term stakeholder we must convince of the worthiness of farm support is the general public. I hope these advocacy groups will soon broaden the scope of their target.

    I do want to dispel some of the fallacies expressed in the initial post and the subsequent thread.

    First, there is an assertion that unilaterally reducing farm subsidies is consistent with “free trade” libertarianism. On the surface, this very well could be an accurate view. However, as Senator Lincoln alluded too, what our farmers want most—mind you, much more than subsidies—is to compete on a level playing field within the global market. A first step toward leveling the playing field is to convince Africa, and to a lesser degree Asia, to increase market access. As it is now, Africa has huge import tariffs that prevent American agricultural products from entering large parts of the continent. Similarly harmful, the EU farmers are subsidized, on average, at a rate five times as high as the United States, mostly through supply control. The EU subsidies keep world commodity prices artificially high, arguably, even worse so that US farm policy. So, if we unilaterally reduce domestic farm support, prior to getting the Europeans and the Africans to change their trade policies, we remove all of the US bargaining chips from the WTO negotiating table. Many farmers would like nothing more than to reduce subsidies, but our quandary in the world trade negotiations makes the timing of Bush’s proposed cuts more than merely inconvenient—they are potentially damming!

    Second, if you follow the links on the initial post, you will be lead to sources that include the Environmental Working Group, an environmentalists group dedicated to destroying American agriculture. The initial post relies on this propaganda to support the thesis that farm support is making the large farmers become larger and forcing the smaller farmers to extinction. I have reviewed some empirical evidence that farm subsidies may have some impact on the transformation of the size of American farms. However, other factors have contributed to this trend as much, or more, than farm subsidies. First, urban sprawl has driven up land values and tax basis (so all of us living outside the perimeter have contributed to this problem). Second, energy costs have driven up the cost of fertilizer and fuel. Third, technology in farm machinery, computerized mechanisms, and seed technology have driven up capital outlays and operating expenses. These three factors, collectively, influence a movement of economies to scale within the agriculture industry. I grew up on a small farm, but I recognize the economics of this industry enough to know that large farmers are in much better positions to support our countries demand for efficiency.

    Third, Bush’s suggested cap is preposterous. A $200, 000 Adjusted Gross Income does nothing to consider that $200, 000 cotton picker that is needed to be purchased or that $2500 plus an acre for cultivatable land. By no means does that $200, 000 AGI equal a farmer’s net income, which I am sure is the basis of the 2.3% that Secretary Johanns references. Bush, who I support on the war and on social values, had another option. He could have reduced the payment limitations (currently set at $360,000), while leaving the three entity rule in place. This proposal would have severely limited the number of agribusiness, non-engaged “farmers” from receiving federal subsidies. Admittedly, Bush has proposed this reduction in payment limits three years in a row and Chambliss/Roberts/Lincoln/Cochran have been able to defeat it each time.

    Fourth, JSM, admonishes Chambliss to look after “all of us.” I would proffer that he is doing just that! Americans have the cheapest food supply in the world (10% of our disposable income, on average), due in no small part to our farm support programs. By keeping domestic farmers producing, we keep consumer prices predictably inexpensive. If we eliminated all support tied to production, this departure from the status quo would encourage farmers to move from commodity to commodity or exit and enter erratically on the production side. Such instability in production would invariably lead to wide swing in prices at the supermarket, that would inevitably affect all Americans and disproportionably those impoverished Americans. In the end, because our country has a comparative advantage (due largely because of input cost such as labor, herbicides) with very few commodities, we, our country, could become reliant on other nations for a large portion of our food. Our country is feeling the deafening blow of over-reliance on foreign, unstable countries for one major staple already—oil. Do we really want the same outcome for food?

    I am sure in my haste, I may overlooked a fact or not fully addressed some of the concerns. Nonetheless, please take my view as a rebuttal to the unanswered assertions of prior posters.

  6. jsm says:

    Aren’t the tariffs in Africa & Asia and farm subsidies in Europe attempts by the rest of the world to “level the playing field” with American agriculture? I would think reciprocal tariffs would be the way to deal with this issue. And don’t we pay farmers to grow nothing, or have those kinds of subsidies stopped?

  7. CHelf says:

    How is allowing taxpayers to pay for this on the back end keeping food cheap? We are paying a smaller price at the store but a larger price from the paycheck.

    Regardless of what you believe about EWG, keep in mind it was them who let the nation know that people like Ted Turner were cashing in on this along with many other larger names. This welfare such as the peanut subsidy was to aid the lower end family farmer compete. This instead has become the cash cow (no pun intended) for many corporate farmers out there as a great way to expand their investment portfolio at the taxpayers’ expense.

    There are other means of controlling this without having most of America dole out checks to people who have never even set foot on a farm. Let the market work itself out. Chambliss had a way out in 2002 but chose instead to take the path of money in the campaign coffers. Let’s end the charade of this helping the family farmer and look at the actual dollars and who is truly getting the money at each of our expense.

  8. IndyInjun says:

    jsm wrote “I would think reciprocal tariffs would be the way to deal with this issue. And don’t we pay farmers to grow nothing, or have those kinds of subsidies stopped?”

    EXACTLY.

    Lessee, Chambliss has been revealed here on PP as being a big spender on ag subsidies and Peachcare.

    Explain to old Indy again, what the Republican Party stands for? How do they differ from the Dems?

    Chambliss and his mad spending cronies have bankrupted the USA.

  9. Groseclose says:

    JSM, since the 1996, the United States have not paid farmers to not produce—i.e. supply control. This practice is still a significant part of the EU’s Common Agricultural Policy (CAP). The African tariffs are meant to protect mainly African cotton farmers, so to that extent, yes their policy makers their spin it is as a way of “leveling of playing field.” I will outline two reasons against reciprocal tariffs. 1) Tariffs and supply control were for a long time part of our nation’s farm support program. In essence we unilaterally disarmed that aspect of our support program, relying exclusively on direct support. This policy choice was made in the context of much larger trade interests beyond the scope of simply farm program. 2) I know this sounds somewhat nonsensical considering my position on domestic support, but embracing tariffs as astronomical as those used by the Africans sets our goal of a free world market and global efficiency back by several generations.

    CHELF, Farm support makes up less than ½ percent of federal budget; much of this money goes to the conservation and energy titles of the 2002 Farm Bill. These seems like a small price to pay for food supply stability. During in no time in American History since the Great Depression have great parts of our society went without food. This is no coincidence considering that farm support program began with the Agricultural Adjustment Act of 1930s. This lack of hunger has lead our general population to ambivalently take for granted the availability and affordability of a plethora of food options. So, I guess I am not as bothered by taxpayers assisting private entities provide a basic and irreplaceable stable of our nation’s economy—agriculture. Admittedly, I am unconvinced of the political sustainability of our current levels of support. Nonetheless, at the very least, the timing of Bush’s proposal is ill-advised.

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