By Jennifer Crull
After reviewing the latest numbers for farm subsidies, it is easy to see why we are in need of dramatic changes.
The Environmental Working Groupís website (http://farm.ewg.org) has federal farm subsidy data from 1995 to 2010. The federal program that was started to help small, struggling farmers is now used to support large farming operations.
We see a huge imbalance of the large farmer versus the small farmer: 80 percent of the commodity payments went to the top 20 percent of recipients, who got an average payment of $325,382. The larger you are, the better the government takes care of you ó not that you are necessarily more efficient or more productive. This also means that small farms that are surviving without so much government funding are doing something right.
The federal government is picking winners and losers based on this system and not encouraging the free market to work.
But as long as the government is so heavily involved in the farming program, the free market cannot work. According to U.S. Department of Agricultural data collected in the 2007 USDA Census of Agriculture, 80.7 percent of farms in Iowa received subsidy payments.
Creation of the farm subsidy program was in the 1930s, with the idea that it would provide some security for production of wheat and cotton. It has expanded in ways unforeseen. That is the problem with many entitlement programs: they grow until they are out of control.
This is why there are proposals in both the U.S. House and Senate attempting to bring back control. House Budget Chairman Paul Ryan, R-Wis., has proposed a reduction of the direct payments subsidies and reforms to control the soaring cost of federally subsidized crop insurance. These reforms could save taxpayers about $30 billion over the next decade. Sen. Chuck Grassley, R-Iowa, and other senators have introduced legislation that would set a hard cap of $250,000 in farm subsidies per married couple.
Those proposals, if approved, would be a good start, but Congress needs to do more to allow all farmers the full opportunity to excel and develop their entrepreneur spirit.
Jennifer L. Crull is a research specialist, Public Interest Institute, Mount Pleasant. Comments: Public.Interest.Institute@LimitedGovernment.org.