If you thought Soviet-style central planning ended when the Iron Curtain fell, think again. The United States Congress still does it.
The just-passed five year Farm Bill is the most-recent example. Much of the bill’s projected $867 billion spending is for the Supplemental Nutrition Assistance Program (SNAP), better-known as food stamps. The rest is mostly corporate welfare for politically-connected ag-related interests.
Non-farming Americans tend to be nostalgic about “family farms” and think farm bills preserve them. That’s seldom true. Farm bills are primarily huge taxpayer- and consumer-funded giveaways to large food and farm interests. In fact, farm commodity price protections and high corn prices driven by the ethanol mandate encourage larger farm operations to seek greater federal benefits by purchasing family farms. American farm policy has driven up the price of farmland and made farming careers less accessible to young farmers.
Nothing in farm policy more closely parallels Soviet central planning than the bill’s reauthorized sugar program.
The sugar program rewards politically-generous sugar producers and refiners by limiting the domestic supply of sugar, guaranteeing sugar producers a minimum price, and restricting imports. Sugar price supports and import limits waste taxpayer dollars, raise food prices, kill confectioners’ jobs and limit opportunities for small cane farmers in poor countries.
For more than three decades, sugar policy has made American consumers and confectioners pay two to three times the world price for sugar. Although sugar-producing crops aren’t grown or refined here, arguably no Farm Bill feature has had greater impact on Central Pennsylvania.
Over that time, Central Pennsylvania lost thousands of Hershey Company jobs, first to Canada and then Mexico where the company is able to access the world price for sugar, a primary ingredient in Hershey’s products.
The Farm Bill is a prime example of legislative log-rolling, or vote trading. As written, farm benefits make up about 20 percent of the bill’s cost. Years ago, eager to protect agricultural subsidies, farm-state legislators added food-stamp funding to farm legislation. Combining them created an overwhelming voting bloc linking rural entitlements to urban legislators’ public welfare interests, all fearing that separate congressional votes on SNAP and farm policy would eventually force reforms to both. The bloc was powerful enough to overturn a 2008 presidential farm bill veto.
Farm commodity price supports are hidden taxes on every American food buyer, ironically including the needy SNAP recipients the Farm Bill purports to assist. Most farm benefits go to giant agri-businesses, not small family farms. Historically, about a third of subsidies go to the wealthiest 4 percent of farm businesses. 80 percent of farms nationwide share about one-tenth of benefits. The new bill awards benefits to “city slickers” and non-farming distant relatives of the bill’s beneficiaries.
It’s a symbiotic relationship. Big Agriculture dispenses lots of campaign cash. Both Democrats and Republicans harvest the lucre.
Washington politicians are touting the new Farm Bill as an example of how the parties can work together, while omitting that their “cooperation” shafts American consumers, taxpayers and, potentially, Hershey workers one more time.