The effect of talking about this subsidy is curious. Farmers said they would rather compete than have a subsidy to help alleviate the problems of our Global Tariff War. Now think about that a minute. Aren't there lots of farm subsidies already? Yes, about 39% of farmers receive some subsidy from the Federal government, mainly to what is called agribusiness:
The federal government spends more than $20 billion a year on subsidies for farm businesses. About 39 percent of the nation's 2.1 million farms receive subsidies, with the lion's share of the handouts going to the largest producers of corn, soybeans, wheat, cotton, and rice.***
.................................................................
Agriculture has long attracted federal support. The Morrill Act of 1862 established the land-grant colleges to teach agriculture and other subjects. The Hatch Act of 1887 funded agricultural research, and the Smith-Lever Act of 1914 funded agricultural education. The Federal Farm Loan Act of 1916 created cooperative banks to provide loans to farmers. That developed into today's Farm Credit System, which is a government-sponsored financial system with more than $280 billion in assets***.
................................................................
Between the 1940s and the 1980s, Congress considered farm policy reforms occasionally, usually when commodity prices were high, but then reverted to subsidy expansions when prices were lower.3 In the 1980s the Reagan administration proposed cuts to farm subsidies, but farm finances took a bad turn, and that prompted Congress to increase farm aid, not reduce it.***
................................................................
In 1996 Congress enacted reforms under the "Freedom to Farm" law, which allowed farmers greater flexibility in planting and increased reliance on market supply and demand. But Congress reversed course in the late 1990s, and it passed a series of supplemental farm subsidy bills. As a result, subsidies over the seven years of the 1996 farm bill ended up costing more than double what had been promised.***
................................................................
In 2002 Congress enacted a farm bill that further reversed the 1996 reforms. The law increased projected subsidy payments, added new crops to the subsidy rolls, and created a new price guarantee scheme called the countercyclical program. The 2002 law increased projected farm subsidy payments by 74 percent over 10 years.5
In 2008 Congress overrode a presidential veto to enact farm legislation that added further subsidies. The law created a permanent disaster aid program and added a revenue protection program for farmers to lock in profits from high commodity prices. It added a sugar-to-ethanol program to keep sugar prices artificially high, and it added new subsidies for "specialty crops" such as fruits and vegetables.***
Then there is what happened in 2014 that I'll skip. If you want to know more, please see the reference. Girls and boys, while farming is still a risky business, farmers are getting lots of subsidies already.
My guess is that, if once enacted, the $12 billion of farm subsidy to alleviate effects of our Global Tariff War won't go away but will just be more agricultural Socialism going mainly to agribusiness.
*http://stopcontinentaldrift.blogspot.com/2018/07/not-all-tariffs-are-bad-for-american.html
https://www.cnbc.com/2018/07/26/us-china-trade-war-idaho-may-be-biggest-victim-but-not-for-potatoes.html
https://www.cnbc.com/2018/07/24/trumps-12-billion-aid-for-farmers-risks-unintended-consequences.html
https://www.cnbc.com/2018/07/25/tariffs-are-about-to-hit-consumers-and-it-wont-be-pretty.htm
** https://www.nbcnews.com/business/economy/mexico-will-impose-20-percent-tariffs-u-s-pork-n880176
https://www.porkbusiness.com/article/pig-farmers-hope-chinas-tariff-us-pork-short-lived
*** https://www.downsizinggovernment.org/agriculture/subsidiesl
No comments:
Post a Comment