The PJ Tatler

What’s Next for the Farm Bill? Free Markets, Perhaps?

The Farm Bill was voted down in the United States House of Representatives.

This was hay-yuge.  As best as many of us who follow this nightmare mess can remember, a Farm Bill has in fact never before failed to pass.

In large part because it was a graft harmonic convergence.

A political numbers-reality has existed throughout that has made (improving – let alone stopping the Farm Bill) impossible.

Nearly every Democrat will always be for just about any government program – of course including crop subsidies.  On principle.  It’s government – and they always want it to do more.

Then there are rural Republicans.  Whose states (Senate) and many districts (House) contain crop subsidies recipients.  So as conservative as they may be on most other things – and many of them are – they always have and likely always will be terrible on this.

This Democrat-Rural Republican block has remained immovable and unbeatable on crop subsidies.

And just to make sure the government gravy train kept a-rollin’ – for thus far nearly fifty additional years:

Food Stamps are the lions’ share of the Farm Bill money being spent.  Two-thirds of the 2008 Farm Bill was Food Stamp coin.  This year’s topped 80%.  Which begs a question – why is this gi-normous unrelated welfare program a part of the welfare Farm Bill?

Food Stamps Are Key Component to Getting Farm Bill Passed

“[Food stamps] should continue to be included purely from a political perspective. It helps get the farm bill passed,” (Mississippi Republican Senator Thad) Cochran said.

He went on to defend federal nutrition programs, including food stamps and subsidized school meals. “I come from a state where we have higher-percentage participation [than the national average]. It is part of my representation of the state that I make sure that those interests get represented,” Cochran said.

“I have never had to apologize in Mississippi for supporting it,” he said, referring to food stamps.

No one ever has to apologize to government-money recipients for defending their continued government-money reception. 

You get urban Democrats and rural Republicans voting together – you have the key to perpetual passage.

Until this year.  Why?  Because we’re starting to see cracks in the old Farm Bill welfare wall.

  • An attempt by the dairy industry (a government regulatory disaster if there ever was one) to impose strict supply caps – which would have increased prices – was in a lopsided vote stripped out of the bill.

A component of the Farm Bill mentality is anti-free market protectionism – but this year we saw slivers of light beginning to shine through there too.

  • An effort to impede imports of European olive oil was soundly defeated.

The marketplace for nearly all things is now global.  Few global markets are less free than agriculture.  Our ridiculous Farm Bill’s subsidized and protectionist-ed content is replicated in nation after nation.

Take for instance the sugar market.  It can not and will not be a free market if the U.S. – and only the U.S. – rids itself of its sugar silliness.

The European Union did, and

Brazil’s leading role as a sugar exporter was further heightened when the European Union (EU), which supplied as much as 20 percent of global exports in the 1990s, shifted from a net exporter to a net importer following sugar policy reforms in 2005. This shift removed a traditionally important supply source from global markets and has made sugar importers more reliant on Brazilian exports.

Speaking of Brazil:

(The U.S.) sugar tariff regime is in response to ridiculously huge Brazilian subsidies – $2.5 billion worth last year alone….

Has Brazil grown their government-sugar industry with decades worth of these multi-billion dollar subsidies and regulatory mandates?  Yes.

Does Brazil cut direct checks to sugar farmers?  Yes.

Does Brazil give sugar farmers “loans” – and then forgive and forget them?  Yes.

(Translation: We’ll loan you money, and then walk away never expecting you to repay a dime.  Remember Joe Pesci in Lethal Weapon?)

And the Big Government parade continues unabated.  Brazil just announced for 2013 $480 million in new sugarcane ethanol tax breaks and $1.9 billion in Joe Pesci ethanol loans.

All of this Leviathan largesse has led to Brazil controlling 50% of all the world’s sugar exports.

Does that sound like a free global market to you?  Me neither.

So before the House reconsiders any aspect of the likely-dormant-but-not-dead Farm Bill, they should perhaps rid themselves of their seventy-plus-year-old domestic-only perspective.

Acknowledging the global reality that now exists will lead to far better policy – both here and abroad.

Everyone’s Sugar Subsidies Need to Go

We should start there.