To Trim Government Fat (and Fix Food Production), Look No Further Than Our Bloated Farm Policy

You don't need to be a Michael Pollan devotee to appreciate how thoroughly dysfunctional our agricultural policy is. Though rightly credited for helping usher in the modern era of cheap, plentiful food, it has since devolved into little more than a sop to big agribusiness: a bounty of wasteful subsidies aimed at getting farm-state votes and enriching millionaire businessmen rather than promoting diversified crop production and improving the lot of small farmers.

The most glaring sign of its failure came in a GAO report released last week that found that farmers whose incomes exceeded $2.5 million -- making most ineligible for any form of government support -- had received close to $49 million in subsidies between 2003 and 2006. The report rapped the USDA for not doing enough to enforce its own rules, recommending that it work with the IRS to create a new verification system. This wouldn't be the first time that the Department of Agriculture was caught flat-footed: A previous GAO report found that it had doled out $1.1 billion between 1999 and 2005 to over 170,000 farmers -- none of whom were alive.

President-elect Obama cited the subsidy abuse as a prime example of the type of government waste he hoped to cut during his first term in office. In selecting Peter R. Orszag, an extremely competent economist who made budget reform his priority while at the Congressional Budget Office, to head up the Office of Management and Budget, Obama has made it clear that he takes the problem seriously.

If he intends to make good on his promise to effect real change, though, Obama will have to be ready to knock heads on both sides of the aisle. The Democrats were as complicit, if not more so, in crafting some of the worst-written farm legislation in recent years. Take this year's iteration, a massive $286 billion bill larded with billions in subsidies -- mostly aimed at a handful of crops, including corn, wheat, rice, soybeans and cotton. As Ken Cook, the president of Environmental Working Group, an environmental watchdog, and the auteur of the essential Mulch blog, wrote then:

Though net farm income reached a record level of $88.7 billion in 2007, propelled by high market prices for major crops, Washington still sent out over $5 billion of taxpayers' money in "direct payment" farm subsidies to over 1.4 million recipients. Over 60 percent of the subsidy was pocketed by just 10 percent of the recipients-the largest and generally wealthiest subsidized farming operations in the country.

Congress is about to be grotesquely generous to big, subsidized farms that are now enjoying unprecedented prosperity, including double-digit increases in farmland prices. The list of farm subsidy beneficiaries we're publishing today will make clear the disturbing degree to which congressional leaders are catering to the powerful farm subsidy lobby at the expense of ordinary American taxpayers, while shortchanging other vital national needs."

Many of its largest beneficiaries live in Los Angeles, San Francisco, Washington, D.C., and other major metropolitan areas -- hardly the type of small town, rugged farmers the bill is supposed to be aiding. Indeed, most do not even receive subsidies anymore; their only prize is a $2 billion grant for research and marketing assistance.

Under heavy pressure from special interest groups and farm-state legislators, the Democratic leadership caved on its promise to increase conservation funds, which would've helped protect water quality and wildlife -- opting instead to slash them by $331 million in fiscal year 2009. At the time of the bill's passage, House Speaker Nancy Pelosi lauded it for containing "historic new investments" in crucial conservation measures. As many shrewd observers predicted, that claim turned out to be hollow.

According to EWG, the Environmental Quality Incentives Program (EQIP), a set of policies aimed at helping improve water quality, conserve soil and protect wildlife habitats, suffered the brunt of the cuts -- close to 86 percent. Other programs to fall under the budget knife include the Wildlife Habitat Incentive Program, Grassland Reserve Program, Agricultural Management Assistance and the Farmland and Ranchland Protection Program.

Eliminating government waste, though good in principle, will not be enough. What we need is a complete overhaul of our broken system: the one that candidate Obama proposed way back when he was still campaigning for the nomination in Iowa, as Chuck Hassebrook, the executive director of the Center for Rural Affairs, noted in an op-ed for the Des Moines Register. Though hardly original, the policies he called for then all make great sense: capping payments to mega-farms, eliminating wasteful subsidies, investing in small farmers and value-added agriculture and others.

The most important reason to support reform, however, may be because of what James Howard Kunstler describes as the "new economy":

All this obviously begs the question: What kind of economy are we going to live in if the old one is toast? Well, it's also pretty obvious that it will have to be based on activities productively aimed at keeping human beings alive in an ecology that has a future. Once you grasp this, you will see that there is no reason to despair and more than enough for all of us to do, so we can recover from the zombie nation disease and get on with the next chapter of American history -- and I sure hope that Mr. Obama will get with the new program.

To be specific about this new economy, we're going to have to make things again, and raise things out of the earth, locally, and trade these things for money of some kind that we earn through our own productive activities. Don't make the mistake of thinking this is optional. The only other option is to go through a violent sociopolitical convulsion. We ought to know from prior examples in world history that this is not a desirable experience. So, to avoid that, we really have to put our shoulders to the wheel and get to work on things that matter, and do it at a scale that is consistent with what the world really has to offer right now, especially in terms of available energy.

In my view -- and I know this is controversial -- a much larger proportion of the U.S. population will have to be employed in growing the food we eat.

One of Obama's greatest legacies could be bequeathing a progressive, sustainable farm policy to future generations -- one that will help cement his standing as the nation's first Farmer in Chief.

Comments

[Thermodynamics]

Another thing I learned about the cotton price support program:

The USDA requires a high level of accuracy in the acreage of a planting. The USDA sends up planes that take aerial photos and then uses those photos with survey marks to determine exactly the size of each cotton field. Farmers that planted a little too much are notified and they have to plow up strips of plants to get the acreage exactly right.

[Thermodynamics]

We have to think like a Martian anthropologist.

The open-minded way to think of "an economy" is as a description of the distribution of resources within a society. It is not a group of natural laws like chemistry or physics. For example, in a fictional society Caste A might be entitled to the profits from trade and the women's club might own all gardens.

Who gets what?
How do they qualify?
Can I qualify for that giveaway?

I need writers to tell me about the farm program in an open way that I can understand.

My ag friends say that profit from cotton is guaranteed, regardless of weather or market price, but only certain people are permitted to participate in cotton production.

If you have an "allotment" of xxx acres to grow cotton your profit is guaranteed as soon as the seed hits the ground. The only way to get an "allotment " is to inherit one or buy a farm that has one.

[Rule Of Law]

Just a quick observation: Until the economy began to affect everyone, the posts on the business section of HuffPo were relatively tiny and generally, apolitical, or at least economics centered rather than party driven.

Now? Just try and post on a Blog re the economy. Folks began to figure out that that dry old numbers stuff really did matter after all.

Fast forward to this article on food. Not much action here, yet. This time next year? When people realized that we are one oil embargo away from a tripling of costs and a halving of availability, this stuff called food that we take so much for granted and the systems that get it to us will become the topic du jour--pun intended. And, as usual, they will all be at least 2-3 years too late.