Washington’s current obsession with deficit reduction may have brought down the nation’s credit rating and distracted from what some may say are more pressing needs for job creation and economic recovery. Yet, a silver lining has emerged: Politicians’ latest stances on agricultural subsidies indicate that this deficit fixation may have opened some historically sticky doors to reducing wasteful government spending.
The United States' agricultural subsidies have strayed far away from the limited safety net for struggling farmers instated during the Great Depression. Today, many agricultural subsidies go to wealthy farmers and corporations. Some even go to non-farmers: Direct payments, which are based on average historical yields for a given parcel of land, are awarded based on whether or not the land is still being used for farming purposes. The Environmental Working Group released a map of subsidy recipients living in decidedly non-agricultural area such as Manhattan and downtown Chicago.
Even crop insurance programs, while clearly more pragmatic than dubious “direct payments,” can be vulnerable to abuse and must be carefully designed. When Congress created a new insurance program for sweet potatoes, some farmers started planting sweet potatoes in such a way as to purposefully obtain poor yields in order to cash in on insurance payments. An extensive investigation of federal agricultural programs by the Washington Post has uncovered a number of additional abuses of taxpayer money funneled through federal agricultural programs.
And then there’s ethanol, which, plagued by controversy over its environmental advantages, benefits from subsidies despite a legal mandate (the Renewable Fuels Standard) that assures its demand.
The past three presidents have tried to curb agricultural subsidies without success, as did Obama last year. Agribusiness is an influential lobbying force in Washington. Now, the nation’s preoccupation with austerity may have changed the tides. Eliminating direct crop subsidies stood out as a deficit reduction measure on which Democrats and Republicans (even Iowa Republican Senator Chuck Grassley) agreed. Obama’s 2021 budget proposal contained cuts in farm subsidies, and most of the GOP presidential hopefuls support eliminating the $6 billion put towards ethanol subsidies each year. This June, the Senate voted to eliminate ethanol subsidies.
Hopefully, with new urgency surrounding the call to eliminate wasteful spending, politicians will finally have the political will to tailor our agricultural programs to those that truly do good.
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