Tuesday 03rd of March 2015

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Here's a Simple (Minded) One Print E-mail
Written by Mike Smith   
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And again, the editorialists at the New York Times dust off the food-system cliches in yesterday's "Here's an Easy One," arguing this is a no-brainer for instant Obama administration budget savings: Simply lop off those silly federal farm subsidies that waste "$10 to $30 billion" each year giving away corporate welfare to a few giant corporate farms. The food ActiviSphere was quick to unanimously pat the Times on the back, bobbing their heads in agreement with the party line that farm subsidies distort the $2.8 trillion food system, encouraging "mainly large-scale farmers" to apparently slavishly plant (or not plant) regardless of what the market tells them.

But those darned inconvenient facts get in the way. Again. What the Times fails to see in its typical superficial bump-and-run on the complicated issue is what a Truth in Food analysis of the numbers behind the cliches clearly shows.  As the chart below shows, while it's true the largest dollar amount of farm subsidies go to the largest farms (as you would expect, since subsidies are typically tied directly to production, and production is tied directly to gross sales), looking at the microeconomic effects of subsidies on individual farms should correctly lead you to an entirely different conclusion.

Some facts the Times missed in its simple analysis

For 2007 (the most current statistics) farms that received government payments and grossed less than $25,000 per year -- that is, the small, part-time darlings of the authentic farming movement for which the Times Food Section reserves its most lavish praise -- took in an average 75 percent of the value of the crops they raised in the form of government subsidies. For the smallest farms -- those grossing less than $1,000 yearly -- the percentage skyrockets to nearly 300 percent. In other words: The smallest farms that took payments from the federal government earned three times more in subsidies than the typical farmer in the size category earned in crop sales.

Compare that to farms grossing more than a million dollars annually. Farms taking government payments in that size group received two pennies in government aid for every dollar the average farm earned from crop sales. And in the largest, giant corporate farm category, that government largesse falls to less than half a percent of gross sales.

I applaud the Times for apparently finally recognizing there is at least some place where it's safe to part ways with its Economist in Chief Paul Krugman and to stem the bleeding of stimulus dollars from Washington. And for the record, I am no fan of federal farm subsidies. (It's a sentiment I find many farmers will likewise express in private. Many cling to hesitant support for farm payments as simply the devil they know, understanding in the warped world of Washington budgeting, cutting their farm payments would never likely see those billions returned to the ledgers of the taxpayers they were siphoned from. They would instead merely be directed off to another, potentially harmful, pet re-stimulus somewhere else). However, to argue professional family farms are directed to cropping decisions that distort the U.S. food system by government payments that, on a $40,000 annual salary would amount to roughly the cost of a week's worth of groceries, may be an easy answer, but it's the wrong one.

 

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