Thursday, July 26, 2007

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The power of the farm lobby

The New York Times' David Herszenhorn explains in depressing detail why farm subsidies will not be cut back anytime soon -- despite the fact that market conditions are at an ideal point for doing so:

For the many critics of farm subsidies, including President Bush and Speaker Nancy Pelosi, this seemed like the ideal year for Congress to tackle the federal payments long criticized as enriching big farm interests, violating trade agreements and neglecting small family farms.

Many crop prices are at or near record highs. Concern over the country’s dependence on foreign oil has sent demand for corn-based ethanol soaring. European wheat fields have been battered by too much rain. And market analysts are projecting continued boom years for American farmers into the foreseeable future.

But as the latest farm bill heads to the House floor on Thursday, farm-state lawmakers seem likely to prevail in keeping the old subsidies largely in place, drawing a veto threat on Wednesday from the White House.

“The bill put forth by the committee misses a major opportunity,” Agriculture Secretary Mike Johanns said Wednesday. “The time really is right for reform in farm policy.”

Faced with fierce opposition from the House Agriculture Committee, Ms. Pelosi and other Democratic leaders lowered their sights and are now backing the committee’s bill, in part to protect freshman lawmakers from rural areas who may be vulnerable in the 2008 elections....

A group of dissident lawmakers led by Representatives Ron Kind, Democrat of Wisconsin, and Jeff Flake, Republican of Arizona, is still pushing a plan to curtail the subsidies sharply.

But they have been largely outmuscled by the Agriculture Committee. It 46 members are slightly more than 10 percent of the House but their districts received more than 40 percent of all farm subsidies from 2003 to 2005, according to a database compiled by the Environmental Working Group, which opposes the subsidies.

Critics in Congress include fiscal conservatives who deride the payments as wasteful government spending and liberals who call them corporate welfare for agribusiness. All say the measure will simply perpetuate the overly generous subsidy system, at a point when American farmers are well-positioned to weather changes.

“When farm prosperity is as good as it is right now, this is the time to reform,” said Representative Paul D. Ryan, Republican of Wisconsin and a member of the dissident group. “If we can’t reform these farm programs at this moment in our history, we will never be able to do it.”

The group has proposed an amendment to the farm bill that would cut subsidies and increase spending on environmental conservation, rural development and nutrition programs, including food banks. It would end subsidies to farmers earning more than $250,000 a year, similar to the $200,000 cap proposed by the Bush administration. It would also substantially limit payments that farmers receive under guaranteed loan programs.

The effort by Mr. Kind has exposed divisions among House Democrats, some of whom argue that he could cost the party its new majority. The fear is that freshmen Democrats from rural swing districts could lose their seats if voters blamed them for lower farm subsidies. Mr. Kind rejected such assertions. “The vast majority of our new members benefit from our proposal,” he said....

The strategic maneuvering by the administration, and some unusual alliances on Capitol Hill, reflect the curious politics of farm policies, cutting across party lines and mirroring regional interests more than partisan loyalties.

The keen interest in the bill, even among urban lawmakers from districts without a corn or barley field, underscores the vast scope of the farm bill, which includes not just agriculture policies but nutrition programs like food stamps, and an array of energy, land conservation and other programs.

posted by Dan on 07.26.07 at 11:20 AM


The Dems obviously do not want to spend any political capital on reducing ag subsidies given the nature of the benefits to winners and losers. There are other, more "important", issues for them to spend it on.

Will farm subsidies ever be significantly decreased? Will it take an intense period of high (low) economic growth?

posted by: Jake on 07.26.07 at 11:20 AM [permalink]

This Farm Bill has been a great education in the cynical economist's view of public policy decision-making. The bill's supporters perfectly gauged how much funding for nutrition, conservation, and fruits and vegetables it would take to split the advocacy coalition that would otherwise have demanded reform. A penny less would not have sufficed.

posted by: Parke on 07.26.07 at 11:20 AM [permalink]

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