Farm bill follies

Welfare: Congress should stop bailing out farmers from normal farm problems.

October 09, 1999

The landmark Freedom to Farm Act enacted three years ago aimed to get the federal government out of agriculture and eliminate farm subsidies. Fat chance.

This year's farm bill, which President Clinton is eager to sign, includes more than $8 billion for farmers who endured floods and drought -- but mainly cyclical low market prices. Worse than the philosophical retreat, the bill would mostly benefit the largest, richest farmers -- not the small farmers with the most desperate needs.

The emergency aid passed by the House last week adds to the $16.6 billion in subsidies earmarked for farmers under the "market transition" program of the 1996 law. It does so without regard to farmer crop loss or financial need. That's equal to about $35,000 per U.S. farm. (Major losses from Hurricane Floyd remain to be addressed in a later bill.)

Farm debt is rising, many farmers sustained crop losses as a result of weather this year and commodity prices are near record lows. But these variations of weather and market are a constant part of farming. Last year, Congress voted $6 billion in farm emergency relief. Each year brings its own perils -- and each year, Washington generously issues "one-time-only" bailouts.

When the 1996 free-market law was passed, advocates argued that if you unchained farmers from government controls, they would aid themselves and the nation's trade balance.

Declining world demand and abundant domestic supply (despite natural disasters) in 1998-1999 have changed the picture. Now politicians want to repeal the Freedom to Farm law, in partly because they're courting the "farm vote" in 2000.

That rollback would be a mistake because the law has not had adequate time to prove itself. Seven years of graduated transition subsidy payments to farmers will complicate the issue. So will massive annual emergency programs.

But the government need not return to dictating prices, production and subsidies. The free-market system can work for agriculture. When emergency farm relief is justified, Washington must show restraint and target it for smaller farmers with legitimate losses.

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