Farm Bill 2012 – Corporate Welfare or National Economic and Security Act?

Farm Bill 2012 – Corporate Welfare or National Economic and Security Act?

Agriculture policy is currently undergoing a transformation in Washington brought about by the dire fiscal challenges that our country faces and the realization that the current Farm Bill is not designed to meet the challenges of the 21^st Century. Drastic changes are inevitable in the 2012 Farm Bill due both to budget deficit reduction and to pressure from many urbanites that argue farm policies no longer best serve the economic health of our nation. There is debate by many that the government should espouse a hands off approach to agriculture, and the recent spending package that will be included in the new 2012 Farm Bill is tantamount to “corporate welfare”.

Numerous activist groups are rallying their bases and lobbying for a free market approach to agriculture believing that this economic paradigm is the best approach to true prosperity. Recently a group in Kansas sent over 16,000 letters to U.S. Senators urging them to reject funding for the almost trillion dollar Farm Bill. Most of the funding, they explained, was used for SNAP, otherwise known as food stamps, and the rest (20%) was used to fund subsidies for crop insurance and agricultural R&D along with several programs to prop up crop prices.

A totally free market approach to agriculture has never been adopted in the history of the United States. Our founders realized the success or failure of this fledgling country depended on its capacity to sustain itself through the production of resources necessary for human development.
Fourteen of the founding fathers were farmers; George Washington, Thomas Jefferson and Benjamin Franklin were the most outspoken advocates for the virtues of an agrarian country and the importance that agriculture played in the economic health of a nation.

“It will not be doubted, that with reference either to individual, or National
Welfare, Agriculture is of primary importance. In proportion as Nations advance
in population, and other circumstances of maturity, this truth becomes more
apparent; and renders the cultivation of the Soil more and more, an object of
public patronage.”
-George Washington

Countries worldwide have had a vested interest in agriculture production since the beginning of humanity, all the way back to ancient Egypt. Some think that government involvement in agriculture did not come to pass until after the Dust Bowl Era and the Great Depression. Yet, government’s involvement is traced all the way back to President George Washington who enacted the first agriculture program. President Harry Truman, a Missouri farmer, once said, “Those that don’t learn from history are destined to repeat it.” We must be careful in calling for the federal government to back off of its involvement in keeping our agriculture industry viable. The U.S. Government’s role in ensuring a safe and consistent food supply is of paramount importance both to the economic stability of our country and to our national security.

The involvement in agriculture by the U.S. Government has been an established part of our nation’s history since the first trade restrictions on agriculture imports in the 1700’s. But why has the government so involved? This is the question that many of my urban friends raise, and yet it can be difficult to explain. Price supports and safety nets parallel the governments’ involvement in the nation’s transportation infrastructure. Few would argue that without the United States’ vast network of interstate highways, bridges and railways that we would still be an economic superpower. The U.S. Government took control of developing our transportation system for several reasons. These include: an effective and efficient transportation system was instrumental to our economic strength and therefore for our national security (the U.S. Government’s first priority: US Constitution, Article 1, Section 8, Clauses 11 - 16). Roadways and airport runways cannot be built profitably by the private sector without government funding. Agriculture, like transportation, is the foundation for a prosperous and secure nation. Agriculture is also subject to periods of minimal or negative profits for those in the industry causing detrimental lapses in production if not safeguarded against.

The stark realization remains that even though agriculture is pivotal for our national success, it is not always profitable for farmers and ranchers. We may decide that this is their fate, and that all types of businesses are subject to economic woes that force them out of the market. Yet, what happens when America’s agriculture producers are forced out of business due circumstances beyond their control, such as floods, drought or hail? This does not just affect the producer, but the consumer. Food is the most basic human need, without it, we have no need for fuel, cars, education, technology or entertainment. It is therefore paramount the federal government protect the well being of its citizens by ensuring that they have an abundant food supply, and that we aren’t subject to the mercy of our international trading partners to receive this most basic human need.

We realize that if our agricultural producers are not protected from failure, our ability to feed ourselves will be compromised, putting the United States at the mercy of obtaining food from other nations. Other countries supplying our food needs are not even a consideration, since many countries rely on the United States, the world’s breadbasket, to sustain their populations. Countries like the United Kingdom can no longer produce enough food for its own people, and China, as of this year, imported almost 70 million metric tons of corn and soybeans from the United States to feed its own people. China is expected to increase its food imports from the U.S. by sevenfold over the next few years. I need not describe the nature of future international relations with countries such as China if we withheld their most basic human need due to our inability to foster agriculture production in the most fertile and well nourished cropland in the world.

General Wesley Clark, a general in the United States Army and Supreme Allied Commander of NATO, could not have illustrated this point better.

When the United States rationed food during World War II so citizens and soldiers had enough to eat, the Secretary of Agriculture often repeated the slogan: “Food will win the war and write the peace.”
I think of these words every time I read an article or see a fringe group attacking the modern-day farmer.
The harsh reality is America’s political leaders must take appropriate measures today to ensure that farmers do not become an endangered species tomorrow—a loss we cannot afford.
I am no farm policy expert, but I know about national security, and I know that farmers are as important today as they were in 1942.

Simply put, we must hold the thin green line.
If we cannot feed, fuel and clothe ourselves, then we cannot defend ourselves. If this one bright spot in our economy is choked off, then recession recovery will certainly stall. And, if rural America falters, we open the floodgate to even more fuel produced by nation states that do not share our values and strategic interests—and our country is less secure.

So why is it incumbent upon the federal government to supply these “subsidies” in the forms of crop insurance and price supports that are the cause of outcry among many fiscal hawks on Capitol Hill? To answer that question we must have a basic understanding of the purpose of these subsidies. All federal crop support programs can be classified as serving the purpose of a “safety net.” Crop insurance and programs such as ACRE and SURE ultimately shield the producer from losses that are outside of his or her control, such as floods or drought. The reasoning for the use of the different programs is due to different needs based on crop or region. Crop producers in the Midwest and northern states use crop insurance, whereas specialty crop producers in the South find direct payments more beneficial for their operations, simply because crop insurance was designed primarily for commodity crops (wheat, corn sorghum etc.)

During the 2012 Farm Bill negotiations it has been stressed that crop insurance will be the backbone and main safety net to keep in place, and in so doing absolve direct payments and other forms of price supports. Yet many argue that the government should not be subsidizing crop insurance, and so the question remains why must the federal government subsidize crop insurance? Here we go back to the example of our transportation system. The crop insurance business, just like the transportation industry, is rarely profitable for the private sector. As a result, the federal government creates a private-public partnership with approximately twenty crop insurance firms that provide affordable coverage to farmers. Indemnities paid by these crop insurance firms can be costly and cover a vast geographical area making it necessary for the government to subsidize these payments. If the federal government did not offer these crop insurance companies assistance in the payout of indemnities, insurance rates would have to rise to a level that could not be matched by the producer in order for the companies to cover losses sustained from consistent and widespread payouts due to drought, hail or floods.

Hence, instead of calling the 2012 Farm Bill  “corporate welfare”, it should be called the National Economic and Security Act (NESA).  Agriculture is the one product that America has a comparative advantage in producing. Our $114 billion export market speaks to America’s expertise in food production and our ability to feed ourselves and the rest of the world. Our export proceeds alone almost cover the $189 billion taxpayers are investing to provide a safety net for our agriculture producers. There cannot be a price tag placed on a safe, affordable and abundant food supply.

Agriculture production is the one aspect of the American economy that cannot be outsourced overseas. In terms of the return on the taxpayer’s investment, the dollars invested in agricultural production and research and development programs have consistently provided a positive return for the taxpayer. There are not many, if any current federal programs that provide a stronger return on the taxpayer’s investment. The growth of our export market which helps control our trade deficit, as well as provide the safest and most affordable food supply in the world, is a testament that the Farm Bill works and has worked for the past seventy-nine years. We must be careful not to sabotage the supply of our most basic human need. Our only other alternative would be to relinquish agriculture production from the private sector and into the hands of the federal government. Joseph Stalin tried doing this in Russia as part of his “Five Year Plans” during the last century with disastrous consequences and millions died of famine as a result.

I know firsthand that no government agency or government employee can compete with the work ethic, determination and ingenuity of the American farmer and rancher. The type of spirit and resolve that can only emanate from one who loves the land, who owns it, and who is emotionally vested through generations of sweat, blood and toil and countless working hours from sunrise to sunset day in and day out. We must continue to provide the necessary safeguards for our farmers and ranchers. Those of us who were born after the Great Depression have never experienced living in a United States that was unable to supply the food that its citizens needed. Our agriculture producers go to bat for us around the clock and in the harshest and most demanding working conditions. We must have their back when they need us the most both for their prosperity and ours.

“Cultivators of the earth are the most valuable citizens. They are the most
vigorous, the most independent, the most virtuous and they are tied to their
country and wedded to its liberty and interests by the most lasting bands."

–Thomas Jefferson, Letter to John Jay (Aug. 23, 1785)