Saturday, June 4, 2011

Wealthfare Wednesday, Give or Take

This week's topic is farm subsidies. The 2004 edition of Take the Rich Off Welfare identified over $30 billion in annual handouts to agribusiness (a figure that includes price supports, ethanol handouts and water subsidies). In these lean budgetary times, pressure to trim these subsidies has been... pretty mild, so far. But there has been some movement.

Last week a House committee was pretty proud of themselves for voting to cut direct payments to farmers who make over a quarter million bucks a year. That would be Jeff Flake's Appropriations Committee. This puts them on record as agreeing with President Obama, who made such a proposal earlier this year. This also puts them at odds with their own party's Agriculture Committee. According to them, it would be a much better idea to cut funding stamp recipients. Who do you think will win this battle of ideas in today's GOP?

The system of direct payments, which go out whether you choose to farm your land or not, is a relatively recent development. It's a legacy, not of FDR's New Deal, but of Newt Gingrich's Republican Revolution. The Environmental Working Group has a suite of pages on farm subsidies, and explains direct payments in their handy primer. As they point out, this program alone costs about $5 billion a year, and also has the perverse effect of inflating land prices. Matthew Yglesias hones in on this, noting that some 45% of agricultural land is not owned by the farmer. Inflated land prices benefit the landowners instead, making them "a highly regressive transfer."

The Washington Post put a team of reporters on the aggie welfare beat over the past year and links up to the results at this page. NYT food columnist Mark Bittman offered up a post full of links on his blog. Bittman also offers a contrarian view with ""Don's End Agricultural Subsidies, Fix Them." He argues that we've been subsidizing unhealthy food policy for so long, that some funding in the other direction would help undo the damage.

The Center for American Progress likewise looks to redirect some of the savings from their proposed cuts. Their report focuses only on the $5 billion direct payment system. They identify $35 billion in savings by FY 2020, and suggest that $650 million of that could be redirected into "existing rural-based programs to provide incentives for renewable clean energy, energy efficiency, and advanced dedicated biomass energy crops."

Worthy goals, but something tells me that if our nation's dedicated public servants do come up with some ag policy cuts in their looming budget deal, they won't be looking to "reinvest" them anytime soon.

Anyway, enjoy your "Wednesday." If this keeps up, I'll change the name of the feature to "Subsidy Saturdays."

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