This morning’s Washington Post has an excellent article that shows exactly why government welfare programs, no matter who they are directed at, can never really be reformed to eliminate waste, absue, and inefficiency. In this case, its welfare to farmers, and the 10 years of results we’ve seen from 1996’s so-called Freedom to Farm Bill:
When the Republicans took control of Congress in 1995, they brought a new free-market philosophy toward farm policy. In a break with 60 years of farm protections, they promoted the idea that farmers should be allowed to grow crops without restrictions, standing or falling on their own. The result was the 1996 bill, which the Republicans called Freedom to Farm.
Before they could pass the law, though, they needed to make political compromises to make the farm lobby happy. And the biggest one they made was the concession in the law that stated that farmers would get a fixed amount of money each year as a way of “weening them off subsidies”, and that they would get that money whether they farmed their land or not.
The results, as you can expect, have been predictable:
EL CAMPO, Tex. — Even though Donald R. Matthews put his sprawling new residence in the heart of rice country, he is no farmer. He is a 67-year-old asphalt contractor who wanted to build a dream house for his wife of 40 years.
Yet under a federal agriculture program approved by Congress, his 18-acre suburban lot receives about $1,300 in annual “direct payments,” because years ago the land was used to grow rice.
Matthews is not alone. Nationwide, the federal government has paid at least $1.3 billion in subsidies for rice and other crops since 2000 to individuals who do no farming at all, according to an analysis of government records by The Washington Post.
Some of them collect hundreds of thousands of dollars without planting a seed. Mary Anna Hudson, 87, from the River Oaks neighborhood in Houston, has received $191,000 over the past decade. For Houston surgeon Jimmy Frank Howell, the total was $490,709.
And the story is repeated in countless cases all over the nation. Farmers are being paid a subsidy when they aren’t even farming the subsidized crop. In many cases, they are receiving the money even though they aren’t actively farming any more. And realtors are even using the subsidy as a selling point when farm land is subdivided and developed:
Petty informed potential buyers that because their land had once been an active rice field, they could collect an annual payment from the USDA on the portion that was not developed. They did not have to grow rice or anything else.
“If you have 10 acres and build a house on one, you can continue to get farm payments on those other nine acres without farming,” the USDA’s Johnson said.
Petty used it as a selling point.
“Does it increase the marketability?” Petty asked. “Sure it does.”
Obviously, this was not the original intention of the law, but, as with everything in Washington, intentions mean nothing when they come up against reality:
The annual payments were dubbed “transitional” and were supposed to decline over seven years. Many lawmakers assumed they would eventually end. But two years later, farm prices fell sharply, and the Republican-led Congress gave in to the farm lobby.
Of course they did. There’s alot more to the Post report that’s worth reading, but the lesson is clear; reforming welfare doesn’t work, because the lobbying groups in favor of expanding it will always come back again later and find a way to get the program expanded yet again. The only solution is to cut the beast off completely.
July 3rd, 2006 at 1:40 am
Links and Minifeatures 07 02 Sunday
For those is San Diego (or people who need a loan anywhere in California), over at my professional site, I’m going to be starting quasi-regular features on loans I can really do at the time I post,…
July 3rd, 2006 at 10:24 am
[...] The Washington Post is continuing its series on the state of the farm welfare system, which I wrote about yesterday. Today, they write about an program that pays farmers to compensate for declining prices, even when prices are rising. EDEN, Md. — Roger L. Richardson, a vigorous 72-year-old who grows corn on 1,500 acres of prime Eastern Shore farmland, had a good year in 2005. Thanks to smart planning, shrewd investing and a little luck, he grossed a healthy $500,000 for his crop. [...]
July 3rd, 2006 at 11:26 am
[...] The Washington Post is carrying a series on the farm welfare system. Fellow blogger Doug Mataconis wrote yesterday and again today about it. Just in case you somehow thought welfare was limited to the proverbial single mother with five kids, here’s a chance to see another federal giveaway of our tax dollars. There?s alot more to the Post report that?s worth reading, but the lesson is clear; reforming welfare doesn?t work, because the lobbying groups in favor of expanding it will always come back again later and find a way to get the program expanded yet again. The only solution is to cut the beast off completely. [...]
July 18th, 2006 at 11:00 am
[...] Last month, I wrote here and here, about a series that had appeared in the Washington Post about the manner in which the farm welfare system had been abused and created incentives for otherwise productive farmers to act in ways that would seem irrational outside of the welfare they were receiving from the state. Today, the Post has another interesting article along the same lines, this time about the manner in which farmers and ranchers have taken advantage of federal drought relief programs. CHANDLER, Tex. — On a clear, cold morning in February 2003, Nico de Boer heard what sounded like a clap of thunder and stepped outside his hillside home for a look. High above the tree line, the 40-year-old dairy farmer saw a trail of smoke curling across the sky — all that remained of the space shuttle Columbia. [...]
July 18th, 2006 at 11:12 am
[...] Time To End Farm Welfare?.Again More On The Absurd Farm Welfare System Maybe They Send Flood Aid To The Desert? [link] [...]
July 18th, 2006 at 7:49 pm
[...] The Washington Post has been giving alot coverage to the farm welfare fiasco over the past weeks. We’ve seen storties of people getting farm subsidies who don’t even own farms, other farmers gaming the farm relief system to make huge profits, ranchers who get disaster subsidies even though they’ve never subsidized a disaster, and farm policy being made to benefit one South Dakota Senator. [...]
July 19th, 2006 at 12:39 pm
[...] Time To End Farm Welfare?.Again More On The Absurd Farm Welfare System Maybe They Send Flood Aid To The Desert Politics And Welfare. Perfect Together. Farm Welfare: Its Not Just Welfare, Its Pork [link] [...]
July 22nd, 2006 at 8:31 am
[...] Time To End Farm Welfare?.Again More On The Absurd Farm Welfare System Maybe They Send Flood Aid To The Desert Politics And Welfare. Perfect Together. Farm Welfare: Its Not Just Welfare, Its Pork Farm Welfare: Gaming The System [...]