ONE WELFARE PROGRAM THAT WON'T DIE
(FORTUNE Magazine) – Lost in the budget brawl over Medicare comes news that farm subsidies, America's oldest, most protected welfare program, might finally be phased out. Or not.
Speaker Newt Gingrich had to sidestep the House Agriculture Committee to slip the Freedom to Farm Bill back into the Budget Reconciliation Act. The bill would end the byzantine structure of price supports, loans, and crop guarantees dating to the Depression.
Periodic efforts to replant farmers in a market economy die like seedlings in a windstorm. Ronald Reagan signed a bill in 1985--a five-year plan!--that was supposed to wean agribusiness off the dole. It didn't. George Bush tried again in 1990. Socialism died; the subsidies survived.
Although there is some debate about the wisdom of leaving food production to the whims of the market--what happens if everybody decides to grow corn?--there's little argument that the current system doesn't work well. According to the Organization for Economic Cooperation and Development, taxpayers have forked over more than $400 billion to farmers since 1986, much of it going to a small number of wealthy "farmers," many of whom wouldn't know a cowpat if they stepped in one. About 70% of the nation's farms--the ones subsidies are supposed to save--have received no direct payments in the past ten years.
The GOP vowed change, and when Congressman Pat Roberts, a Republican from Kansas no less, wrote the Freedom to Farm Act, his fellow revolutionaries pronounced it radical. Over the next seven years the bill would do away with loans, price supports, and deficiency payments. Farms would be left to run more like real businesses, and taxpayers would save at least $13.4 billion.
Trying to push his bill through the House Agriculture Committee--a task no more difficult than feeding hay through the wrong end of a bull--Roberts did get lobbying help from big sugar growers in Florida and Hawaii. Why? Sugar isn't covered by Freedom to Farm. Industry subsidies, which cost consumers $1.4 billion a year, would be safe.
Then, in September, four honorables from Southern farming districts--where federal money has made many rice and cotton growers rich--shot Roberts's bill down. "Everybody wants change," says a weary-sounding Roberts. "But they want it, always, for the other guy."
Gingrich still managed to load Freedom to Farm into the budget by way of the Budget Committee. Of course, President Clinton has already said he'll veto the whole megillah anyway. Clinton has also made a Hippocratic promise to farmers to "do no harm" to the current system. Is this the invisible hand to which Adam Smith referred?
- Anne B. Fisher