Below The Beltway

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.

Now, though, there’s one that even I can’t figure out; drought relief for catfish farmers.

One of the more unusual offshoots of Congress’s drought-relief efforts was a $34 million assistance program for catfish farmers.

Under the 2003 Catfish Feed Assistance Program, announced in August of that year, commercial catfish farmers in Mississippi, Arkansas and a handful of other states got government credits for feed equal to $34 per ton.

All they had to do was apply at their local feed mill. The amount they received was based on how much feed they had purchased at the mill in 2002 — not any actual losses.

The USDA advertised the program as “an innovative relief to catfish producers who have experienced losses due to adverse weather and natural disasters,” according to a news release. The agency said a 2002 drought had driven up the price of feed.

In other words, market conditions made the operating costs of catfish farmers higher than anticipated. An ordinary businessman would’ve reacted by cutting costs elsewhere, raising prices, or even swallowing the loss in the short-term for the sake of the business. Fortunately, when you belong to one of the most politically connected industries in America, you don’t have to worry about what an ordinary businessman would do.

The struggles of catfish farmers appeared to have more to do with economics than with bad weather. After expanding for a decade, the industry was contracting in 2002 and 2003 and faced competition from foreign imports that drove prices to record lows. Even though farmers were selling more catfish, their revenue was slipping. Some received separate foreign trade adjustment payments from the government.

“Prices went down in 2002 and 2003. A lot of people had to give up [catfish] farming,” said Terry Hanson, an agricultural economist at Mississippi State University. “But feed prices were very low in 2002-2003, about $200 a ton.”

Mississippi reeled in by far the largest share of federal dollars — nearly $19 million, records show. It has more catfish farms than any other state. It also has a powerful U.S. senator, Republican Thad Cochran, then chairman of the agriculture committee and second-ranking majority member of the Appropriations Committee, looking out for the industry’s interests.

And there you have the common theme that unites all of the farm-welfare stories the Post has been writing about. A powerful politician, in this case Mississippi Senator Thad Cochran used his influence to create a program to shield the catfish industry in his state from the effects of supply and demand and market forces. At your expense and mine. The same thing has been done by Senators and Congressmen from grain-producing states, and Senators and Congressman from states where cattlemen are a powerful influence.

This is porkbarrel politics at its best and it costs Americans twice. Once as taxpayers and a second time as consumers. When you think about it, there’s more of us than them. Maybe its time voices outside the farm lobby got heard.

Related Posts:

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.