Pixel Tracker

Wednesday, March 20 , 2019, 11:15 am | Fair 59º


Veronique de Rugy: The Panderer in Chief and the ‘War on the American Farmer’

Auditioning for the title of panderer in chief during this election cycle are two potential masters.

On one side, you have Hillary Clinton constantly offering "free" stuff, such as college tuition. On the other side, you have Donald Trump promising to protect Michigan's cars, Idaho's potatoes, Harley-Davidson in Wisconsin, Caterpillar in Illinois and corn-based ethanol in Iowa.

But nothing beats Trump's contention that there is a "war on the American farmer" requiring his help to end. The truth is that if there's a war on anyone, it's on taxpayers and individual freedom.

To be fair, there is no doubt Trump's promises to implement regulatory reform and to eliminate the estate tax would be an improvement for farmers and everyone else. However, farmers are such a protected class that it's hard to take the notion of a war against them seriously.

By the end of 2016, the U.S. Department of Agriculture will have spent approximately $25 billion subsidizing farmers this year and another $10 billion to subsidize other agricultural interests, including rural businesses.

Introduced in the 1930s to help struggling small family farms, the subsidies now routinely draw condemnation from both the left and the right as wasteful corporate welfare.

Though the number of farms is down 70 percent since the 1930s — only 2 percent of Americans are directly engaged in farming — farmers aren't struggling anymore.

In 2014, the average farm household earned $134,164 — which is up over 50 percent from 2010 and is 159 percent higher than the income of the average American household.

Also, for all the talk about small family farms, the data show the market is dominated by massive farm businesses. According to the USDA, 88 percent of U.S. farms are small family farms, but 64 percent of vegetable sales and 66 percent of dairy sales come from just the largest 3 percent of farms.

What's more, only a handful of farmers reap most of the benefits from the subsidies.

Traditionally, wheat, corn, soybeans, rice and cotton have taken the lion's share of the feds' largesse. The nonprofit Environmental Working Group reports that "the top 1 percent of farm subsidy recipients received 26 percent of subsidy payments between 1995 and 2014."

The EWG adds: "Under 30,000 farmers received over $46 billion in subsidy payments in that time period. The top 20 percent of subsidy recipients received 91 percent of all subsidy payments, while the bottom 80 percent received just 9 percent of subsidy payments at an average of $7,100."

So don't be surprised if you hear that Saudi Prince Khalid bin Abdullah, a billionaire, could be collecting "hundreds of thousands of dollars in U.S. taxpayer-funded crop insurance subsidies through farms he owns in Kentucky."

As with other crony programs, it might not even be in the farmers' interest to be reliant on handouts from taxpayers, given that economists have repeatedly shown that privileged sectors of the economy often do not receive any actual benefit in the long run.

In farming, for example, the value of the subsidy is capitalized into the price of farmland. So farmers have to pay exorbitant prices for the land entitling them to subsidies. Factoring in these prices, they are no better off as a group.

However, while some subgroups of farmers capture the benefits of the subsidies (the ones who own the land), others are worse off a result (e.g., young farmers with less capital looking to purchase land).

In other words, if there is a war on farmers, it is being waged by a federal government that hands out subsidies to a few rich farmers while placing lower-income and younger farmers at a disadvantage along the way.

— Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University, a columnist for Reason magazine and the Washington Examiner, and blogs about ecomomics for National Review. Click here to contact her, and follow her on Twitter: @veroderugy. Click here to read previous columns. The opinions expressed are her own.

Support Noozhawk Today!

Our professional journalists work tirelessly to report on local news so you can be more informed and engaged in your community. This quality, local reporting is free for you to read and share, but it's not free to produce.

You count on us to deliver timely, relevant local news, 24/7. Can we count on you to invest in our newsroom and help secure its future?

We provide special member benefits to show how much we appreciate your support.

I would like give...
Great! You're joining as a Red-Tailed Hawk!
  • Ask
  • Vote
  • Investigate
  • Answer

Noozhawk Asks: What’s Your Question?

Welcome to Noozhawk Asks, a new feature in which you ask the questions, you help decide what Noozhawk investigates, and you work with us to find the answers.

Here’s how it works: You share your questions with us in the nearby box. In some cases, we may work with you to find the answers. In others, we may ask you to vote on your top choices to help us narrow the scope. And we’ll be regularly asking you for your feedback on a specific issue or topic.

We also expect to work together with the reader who asked the winning questions to find the answer together. Noozhawk’s objective is to come at questions from a place of curiosity and openness, and we believe a transparent collaboration is the key to achieve it.

The results of our investigation will be published here in this Noozhawk Asks section. Once or twice a month, we plan to do a review of what was asked and answered.

Thanks for asking!

Click Here to Get Started >

Reader Comments

Noozhawk is no longer accepting reader comments on our articles. Click here for the announcement. Readers are instead invited to submit letters to the editor by emailing them to [email protected]. Please provide your full name and community, as well as contact information for verification purposes only.