The spectacle of socialized farming

By Michael R. Allen
web posted March 1999

In its 1936 ruling on United States vs. Butler, the Supreme Court declared that farm subsidies and price controls were unconstitutional. "The regulation is not in fact voluntary," began the majority opinion. In the argument, it was established that farmers were being forced to participate in federal administration of farm programs.

After its initial proposal was rejected, the New Deal Congress drafted another (nearly identical) program to fetter agricultural concerns to governmental control. Under tremendous political pressure to "save" the poor farmers, the Court decided to flip-flop and ruled that the farm programs were legal under the premise that the constituted "regulation of interstate commerce," as the proponents asserted. This case, Wickard vs. Filburn (1942), had such an outcome because of the rising tide of New Deal socialism.

The Court at that time had defeated much of President Franklin Roosevelt's agenda, and it probably was correct to do so. However, the nation was yearning for the quick-fix New Deal solutions. Thus, the Supreme Court justices reversed their previous stands for political reasons. It should be noted that, prior to the extreme interventionism of Roosevelt and the more subtle controls of Herbert Hoover, Preseident Calvin Coolidge had twice vetoed bills that would pay farmers for their suplusses. "Farmers have never made money. I don't believe we can do much about it," Coolidge dryly noted.

Unfortunately, their self-serving political actions have led to an archaic monstrosity that thwarts natural change. Of course, it is highly possible that, had the Court ruled differently in 1942, another Court in the future would have upheld similar legislation. The fact remains, however, that farm subsidization is a troubling premise that leaves few choices for anyone involved in the program. Just as with many other socialized programs, the farm program leaves only two alternatives: eradication or total continuance. The subsidies have fostered such dependency that their halt would leave the farm community in turmoil. While subsidies are totally fraudulent in light of constitutionality, it might be necessary to gradually alleviate government controls, much in the manner of the 1995 Farm Bill.

The Farm Bill did not affect the peanut, tobacco, sugar, or cotton subsidies, which are as big of money-makers as any other program. Many farmers have gained vast fortunes through the government subsidies that continue to pay farmers for land that is not planted. Senators in states like Iowa, Mississippi, and Kansas commit political suicide if they are too "severe" in the eyes of their rural constituents. Most of the influence comes from agribusinesses like Archer-Daniels-Midland. Neither Democrats or Republicans are shortchanged, as both parties are equally likely to support subsidies.

During the 1993 floods, ludicrous crop insurance programs reached a new level of oddity: thousands of acres of farm lands, already lying in areas determined to be flood plains, were destroyed and paid for with millions of tax dollars. Where is the justice for other American workers? When the watch-making business is slower that usual, does Uncle Sam pay Timex for the difference between sales in year X and year Y? Of course not, but that would be too obvious. Big business is ever so artful about cloaking its Federal loot.

The farm subsidy program stems from the belief that we are a nation of farmers. This antiquated notion has been factually disproved, yet the government still acts as if there is a need in 1999 for 1899 production levels. This, in turn, creates huge surpluses and enslaves the farmer. A small farmer finds it impossible to enter a system that does not operate on a free-market system.

The solution lies in a choice between the free market and neosocialism. America must move forward and allow the market to reclaim agriculture. The benefits are myriad: lower prices, improved technology, increased entrepreneurial spirit, but most importantly the individual rights of farmers would be restored.

Has anyone in government ever realized that a 1999 market does not need the same amount of farming activity as did a 1936 market? In sixty years, technology has increased rapidly and farming is no longer a way of life for America. Less than 1/3 of Americans are farmers, so it is blatantly obvious that society has changed. Now, it is time for government to move forward as well.

If a Democratic administration unwisely began the farm programs, then a Republican President's staff totally mismanaged the entire program. At the beginning of Ronald Reagan's first term in 1981, farmers received a total of $9.8 billion in aid. By 1986, the farm aid programs totalled a massive $29.6 billion. By comparison, Aid to Families With Dependent Children (AFDC) received only one-third of the $20 billion increase farm subsidies received.

Near the end of the Reagan administration, the President signed a bill that created the Federal Agricultural Mortgage Corporation, which gave farmers loans of up to 80 per cent of their total farm value. The cap on farm value was a stark $2.5 million, meaning that a farmer could receive a government-insured loan of up to $2 million. The farm credit system, which holds more than half of all farm debt, forgave $9 billion worth of farm debt in mid-1988. Incidentally, then-Vice President George Bush won the Midwest handily on the day of the General election. Is it little wonder that farmers are, as David Frum wrote, "the staunchest Republican voters this side of Park Avenue?"

Recently, Rep. Bill Archer (R-Texas) proposed eliminating the ethanol subsidy. His call from a withdrawal by 2000 led to protests from members of his party and from corn farmers. Once again,
Archer-Daniels-Midland (the largest ethanol supplier) was leading the charge to preserve the benefits not afforded to other industries.

The market sets the number of tailors, doctors, and lawyers by keeping up with demand and eliminating the unnecessary jobs and services. There is no reason why farming should not be completely absorbed into the American marketplace.

Supporters' Absurdity

Since the days of the New Deal, the federal government has chosen to bear the burden of being agriculture's primary patron. Through a barrage of price supports, loan programs, and direct cash subsidies the Department of Agriculture has catered to every farmer or businessman owning any parcel of land. At the same time, other industries have developed and thrived independent from Big Brother and his payload of goodies. In 2002, soybean, wheat, rice, corn, cotton, and all other grain subsidies and controls might expire (recent disaster relief laws may keep them going). However, certain untouched spheres of farm life are trying voraciously to make sure that they remained untouched. Tobacco farmers, sugar farmers, and peanut farmers have all found enough bipartisan sponsors to defeat any measure that would ensue even modest adjustments to their programs. This week, another subsidized group whined - loudly. Startled observers, including this writer, learned that there is a subsidy so ridiculous that one would have not believed in its existence: the ethanol subsidy!

This is no small potato. Okay, it is to Uncle Sam and Senator Pete Domenici, but to us laymen a $600 million annual subsidy represents a staggering abuse of funds. Budget hacks and supporters of the subsidy have adroitly hidden its presence for years, as no one has tried to cut this entitlement before. However, its concealed occupation of the ledger pages was no more when House Ways and Means Chairman Archer announced that he is designing legislation to kill the hideous monster by the year 2000, with an extended removal plan. Corn growers who likely supported the reform of welfare balk at the thought of losing their unlawful incomes.

"If it went away, it would be a detriment to this country," said Vic Riddle, a corn grower from Illinois in 1997. The ill-informed Riddle has a point: its departure would be of detriment much in the same manner as if Ross Perot decided to depart for some tropical island.

The corn growers have appointed a flack in the House now. Representative John Shimkus (R-Illinois), whose other brilliant idea is banning flag-burning, is adamant in his dogmatic support for farm welfare: "Our family farmers worry enough about how the elements and other outside factors will affect their crops." So do us flower growers, but we don't get a subsidy for wilted petunias and trampled acidanthera. Shimkus's argument is a classically facetious defense of the unprotectable. In essence, he is saying that the weather's unpredictability makes farming different and in need of help. Window-washing, baseball games, street-sweeping, constructing buildings, laying roads and sidewalks, and performing music are just some of the many activities dependent on good weather which have no direct subsidy. The Illinois Republican is perhaps swayed by the fact that his state produces more ethanol than any other. Also his defense may stem from another fact: the GOP-friendly Archer-Daniels-Midland Company located in Decatur, Illinois processes seventy percent of all ethanol. As to pure ethanol's superiority, I have yet to see an ethanol commercial or put one drop in any car that I have attended.

Why do we subsidize farms? According to Riddle, Shimkus, and many others it's because the farmers can't count on the weather and need assistance. According to the rest of us, it's just another case of that contagious and vile plague known as absurdity.